apportionment

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By Nick Kump and Todd Lard

The Texas Comptroller of Public Accounts has issued a private letter ruling finding that a Texas company’s revenue from sales of real-time payment risk and fraud prevention services should be sourced to the location of Taxpayer’s customers. In Texas, receipts from a service are sourced to the location where…

In a rare special meeting on February 24, 2017, the Multistate Tax Commission (MTC) adopted amendments to the MTC’s Model General Allocation and Apportionment Regulations that it has worked on since 2014. Among other things, the 94-page Model Regulations:

  • Provide a new section related to market-based sourcing of receipts from the sale of services and

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By Jessica Allen and Jonathan Feldman

The New York City Tax Appeals Tribunal administrative law judge (ALJ) determined that a taxpayer’s receipts for consulting services should be allocated based on where the services were rendered, not where the solicitation and payment for the services occurred. The taxpayer’s non-commissioned salespeople entered into lump-sum subscription agreements with…

By Elizabeth Cha and Timothy Gustafson

On October 26, 2016, the South Carolina Court of Appeals reversed a lower court ruling and determined the Department of Revenue (Department) failed to satisfy its burden of showing that the statutory apportionment formula did not fairly represent Rent-A-Center West Inc.’s (RAC) business activities in South Carolina. This case…

By Douglas Upton and Andrew Appleby

The New Jersey Tax Court determined that credit card issuers must source to New Jersey all of their interest and interchange fee receipts, and half of their credit card service fees, from New Jersey accountholders. The Tax Court concluded that the Division of Taxation’s regulations required the taxpayers to…

By Zachary Atkins and Open Weaver Banks

The New Jersey Tax Court held that apportioning all of a company’s income to New Jersey for corporate business tax purposes, even with the allowance of a credit for taxes paid to separate-return states, failed to fairly reflect the company’s business activities in New Jersey.  The court also…

By Chelsea Marmor and Tim Gustafson

The Texas Comptroller of Public Accounts issued a franchise tax letter clarifying that “total mileage” for purposes of computing the Texas special apportionment formula for transportation receipts may either include or exclude “empty miles” provided symmetry is maintained between a taxpayer’s numerator and denominator. “Empty miles,” or deadhead miles…

By Nick Kump and Scott Wright

The Louisiana Court of Appeal held that income derived from diagnostic testing of Louisiana patients’ blood samples and other medical specimens performed in Texas should be sourced to Texas for corporate income tax apportionment purposes. The taxpayer, which operates a multistate network of laboratories where it performs medically prescribed…

By Chris Mehrmann and Open Weaver Banks

The Michigan Supreme Court denied an application for leave to appeal a Michigan Court of Appeals decision that sanctioned the Michigan’s Legislature’s retroactive withdrawal from the Multistate Tax Compact. The court summarily denied the appeal—which was filed by Harley Davidson Motor Company, Inc. and 13 other taxpayers—explaining that…