corporate income tax

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On May 24, 2021, the Magistrate Division of the Oregon Tax Court denied a taxpayer’s motions for summary judgment, finding the taxpayer’s claim for refund was filed beyond the statute of limitations.  Specifically, on December 4, 2015, the taxpayer filed its Oregon corporation excise tax return for tax year end February 28, 2015. The taxpayer…

The Illinois Tax Tribunal issued an order denying PepsiCo Inc. and Affiliates’ (“PepsiCo”) motion for summary judgment and found that PepsiCo’s subsidiary, Frito-Lay North America, Inc. (“FLNA”), was not an excluded 80/20 company and must be include in the PepsiCo Illinois unitary group corporate income tax return.[1] As originally filed, PepsiCo excluded FNLA from…

On December 4, 2020, the Washington Department of Revenue Appeals Division determined that an out-of-state company’s participation in an annual three-day trade show in Washington state was sufficient to create substantial nexus with the state and subject the company to both business and occupation tax (B&O tax) and retail sales tax. The taxpayer, an out-of-state…

The Minnesota Supreme Court held that the gain from a corporation’s sale of its majority interest in a limited liability company (LLC) was apportionable business income subject to Minnesota corporate income tax. The Court explained that the corporation conducted its business through operating subsidiaries that were owned by the LLC, and that the corporation and…

On remand from the Maryland Court of Special Appeals, the Maryland Tax Court held that an unauthorized insurance company owned by Macy’s, was exempt from Maryland corporate income tax. During the years at issue, Leadville, a Vermont captive, did not earn any Maryland insurance or reinsurance premiums but had substantial interest income from intercompany loans…

The North Carolina Supreme Court affirmed a lower court decision that held that a manufacturer of brake pads used by railroads did not qualify for an exception to the state’s standard three-factor apportionment formula that allows “public utilities” to instead apportion their income using a single-sales factor formula.

In February 2019, the North Carolina Superior…

On May 22, 2020, the Idaho Supreme Court held that the gain realized by a corporate holding company on the sale of its 78.54 percent ownership interest in an LLC was nonbusiness income and therefore not subject to apportionment in Idaho. The LLC was formed in 2003 and manufactured and sold tangible personal property. The…

The Alabama Tax Tribunal held that a taxpayer’s payments to an affiliated entity for employee services were not included in the payroll factor of the apportionment formula for business-income tax purposes because the payments were not made directly to the taxpayer’s employees.

During the years at issue, an Alabama regulation stated that only amounts paid…

The Michigan Supreme Court held that revenue from the performance of services must be sourced to the location where the service provider’s employees performed the work, not where the services were delivered, for purposes of the City of Detroit’s income tax. Detroit imposes an income tax under the Uniform City Income Tax Ordinance (“UCITO”), which…

The New York Department of Taxation and Finance recently published an advisory opinion stating that a taxpayer’s New York corporate income tax filing status should be determined by “what activity [a taxpayer] is principally engaged in” and by whether 50% of its aggregate gross receipts in a taxable reporting period are from such activities. The…