Shaking things up in state and local tax
Shaking things up in state and local tax
By Sahang-Hee Hahn and Pilar Mata
The California Supreme Court held that taxpayers may file a class action lawsuit to claim a refund of local telephone user taxes (TUT) paid to the City of Long Beach. The taxpayer class alleged that the City unlawfully collected the TUT on services that were determined to be nontaxable…
By Saabir Kapoor and Pilar Mata
The California Court of Appeal reversed the trial court’s decision in favor of the State Board of Equalization (BOE), holding that a taxpayer’s evidence of communications with the BOE presented triable issues of material fact as to whether the BOE should be equitably estopped from relying on administrative exhaustion…
Retailers and banks continue to get whipsawed on sales tax bad debt deductions where a retailer provides a private label credit card program in conjunction with a third party bank. The Kentucky Board of Tax Appeals ruled that a retailer was not entitled to a bad debt deduction because it was not the party that…
On December 18, 2012, the California Court of Appeal ruled that receipts from the right to replicate software are sourced as sales “other than tangible personal property.” In reversing the trial court, the Court of Appeal upheld the taxpayer’s use of costs of performance sourcing. Microsoft Corporation v. Franchise Tax Board, Case No. A131964…
As we previously noted, on October 2, 2012, the California Court of Appeal issued an opinion on rehearing in The Gillette Company et al. v. Franchise Tax Board, reversing in full the trial court’s decision in favor of the Franchise Tax Board (FTB). 207 Cal.App.4th 1369 (Op. on Rehearing, Oct. 2, 2012). Read…
The three-judge panel of the California Court of Appeal has reissued its opinion in The Gillette Company et al. v. Franchise Tax Board, finding on the same grounds as in the court’s initial opinion that California was bound by the UDITPA election in the Multistate Tax Compact. 207 Cal.App.4th 1369 (Op. on Rehearing, Oct.
In a non-precedential, summary decision released May 3, 2012, the California State Board of Equalization (the Board) held that a foreign corporation with only one employee in California was “doing business” in the state and thus was subject to California’s corporation franchise tax. Appeal of Warwick McKinley, Inc., Cal. Bd. of Equal., Jan. 11, 2012 (released May 3, 2012). While California recently expanded its statutory definition of “doing business” in California Revenue and Taxation Code (CRTC) section 23101(b) to include a factor presence nexus test, the Board in Appeal of Warwick McKinley, Inc. focused on CRTC section 23101(a), which defines “doing business” to mean “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit.”Continue Reading California Nexus: Not in My House!
On August 21, the California State Senate passed AB 2323, requiring the State Board of Equalization (BOE) to issue written opinions in cases where the amount in controversy exceeds $500,000. If the Governor signs the legislation as expected, the BOE will be required to publish written, formal memorandum or summary opinions on its website within…
For the first time in 50 years, the California Supreme Court is revisiting the issue of the proper application of the property tax to intangible assets. In Elk Hills Power, LLC v. California State Board of Equalization, Case No. S194121, the court will address whether the California State Board of Equalization (the Board) may assess Elk Hills’ intangible Emission Reduction Credits (ERCs). In Elk Hills, the Board treated the ERCs as “necessary” to put a power plant to “beneficial or productive use” and thus taxable for property tax purposes. Because many businesses use intangible assets that are “necessary” to the conduct of their businesses (e.g., trademarks, trade names, franchises, licenses, customer relationships, patents, and copyrights), the case has attracted attention across a broad spectrum of the California business community.Continue Reading California Supreme Court Considers Case to Allow Property Tax on Intangible Assets
In the latest edition of A Pinch of SALT, Sutherland SALT’s Carley Roberts, Prentiss Willson and Maria Todorova discuss the California Franchise Tax Board’s recent chief counsel ruling stating that California’s alternative apportionment provisions do not apply to the combined group’s intrastate apportionment results.
Read “Intrastate Apportionment: Ripe for Equitable Relief?”…
