Shaking things up in state and local tax
Shaking things up in state and local tax
By Zachary Atkins and Douglas Mo
A California appellate court held that an ice cream maker’s property tax appeal involving an alleged failure to make an external obsolescence adjustment was subject to the “substantial evidence” standard of review. The taxpayer asserted that certain production equipment used in its novelty product lines was underutilized as a…
By Madison Barnett and Timothy Gustafson
The Tennessee Department of Revenue announced that the existing opportunity to compromise prior year liabilities related to the disallowance of certain intangible expense deductions will be closing on September 30, 2013. For several years, Tennessee has been issuing wide-scale assessments—using the Department’s discretionary authority—to taxpayers that deducted intangible expenses…
By Zachary Atkins and Andrew Appleby
The Arizona Court of Appeals held that Cable One, Inc. was subject to central assessment as a telecommunications company because of its Voice over Internet Protocol (VoIP) service offering. The court found that Cable One, which provided cable television, Internet access and VoIP services, met the statutory definition of…
By Douglas Mo
The California Court of Appeal ruled that the County of Los Angeles illegally assessed the possessory interest of the lessee of a building owned by the California State Teachers’ Retirement System. The possessory interest was valued pursuant to a special statute that only applied to property owned by a state public retirement…
By Kathryn Pittman and Jack Trachtenberg
On April 17, 2013, Select Medical Corporation (Select Medical) filed suit in federal district court seeking to enjoin Delaware from enforcing an unclaimed property assessment issued for years that had been resolved already through the state’s voluntary disclosure program. In 2006, Select Medical entered into Delaware’s voluntary disclosure program…
Before entering into agreements with taxing authorities to extend the statute of limitations, taxpayers should consider the legal implications of these agreements, which often are dictated by the states. In this edition of A Pinch of SALT, Sutherland SALT’s Jonathan Feldman, Kathryn Pittman and Maria Todorova explore issues that taxpayers should consider before entering into…
By Christopher Chang and Timothy Gustafson
A prepaid telephone card and long-distance service provider’s attempt to source phone card sales receipts outside of Texas was rebuffed by the Texas Comptroller because the taxpayer failed to carry its burden of proof. After initially sourcing 100% of its gross receipts to Texas and unsuccessfully claiming a cost-of-goods-sold…
By David Pope and Timothy Gustafson
The abatement of late payment and tax amnesty penalties was upheld in favor of several United Parcel Services (UPS) subsidiaries by the New Jersey Superior Court, Appellate Division. The taxpayers and their parent company utilized a cash management system designed to ensure that all subsidiaries had access to cash…
In an unusual case, the Oregon Department of Revenue tried to argue that a taxpayer’s receipt of an assessment from two other states held open the statute of limitations for Oregon income tax purposes. The Oregon Tax Court disagreed, holding that the assessment from another state would have to impact the taxpayer’s Oregon income tax…
The Louisiana Supreme Court declined to review the Court of Appeal’s holding that an out-of-state corporation’s passive ownership of an interest in a limited partnership is not a sufficient basis, by itself, to subject the foreign limited partner to Louisiana franchise tax. UTELCOM, Inc. v. Bridges, No. 2010-0654, 77 So.3d 39 (La. App. 1st Cir. Sept. 12, 2011), reh’g denied (Nov. 1, 2011), writ denied, No. 2011-C-2632 (La. Mar. 2, 2012). The court’s decision to not accept the case should prompt the Department of Revenue to reverse course on its current position.
In UTELCOM, the Department issued franchise tax assessments against two out-of-state corporations whose only connection with Louisiana was their ownership interests in a limited partnership engaged in the long-distance telecommunications business in Louisiana. The primary basis for the Department’s position was a regulation that provided that owning property in Louisiana through a partnership is sufficient to create franchise tax nexus. The trial court upheld the assessments based on the Department’s regulation.Continue Reading No Louisiana Nexus Over Out-of-State Corporate Partners
