Shaking things up in state and local tax
Shaking things up in state and local tax
By Chelsea Marmor and Andrew Appleby
The Kentucky Court of Appeals held that a Kentucky statute, which retroactively reduced vendors’ 1% deduction of the sales tax collected and remitted to Kentucky to $1,500 in any monthly reporting period, did not violate the Kentucky Constitution. Wal-Mart argued that the statute violated the Kentucky Constitution because the…
Recently proposed Treasury regulations under IRC § 385 would create sweeping changes to the federal income tax treatment of related-party debt. The Proposed Regulations could also have far-reaching effects for state income tax purposes, particularly on the deductibility of intercompany interest expenses in separate company reporting states.
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By Elizabeth Cha and Scott Wright
The Texas Court of Appeals held that a seismic data gathering company was entitled to a cost of goods sold (COGS) deduction for costs of labor and materials incurred to acquire and process seismic data for its clients. Pursuant to Tex. Tax Code § 171.1012(i), a taxpayer may include…
In a decision sure to give Pennsylvania legislators and the Department of Revenue indigestion before their big Thanksgiving meals, the Commonwealth Court held that Pennsylvania’s net loss carryover deduction cap violated Pennsylvania’s Uniformity Clause because it resulted in disparate treatment of similarly situated taxpayers based on the size of the business.
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By Stephen Burroughs, Jonathan Feldman and Open Weaver Banks
In a significant taxpayer win, the Massachusetts Appellate Tax Board (ATB) held that intercompany interest payments from a wholly owned subsidiary to Massachusetts Mutual Life Insurance Company (MassMutual) were bona fide loans and were deductible for excise tax purposes. The subsidiary (HoldCo) was a holding…
New York Governor Andrew Cuomo introduced his 2015-2016 budget and accompanying legislation on January 19, 2015. After much negotiation, the Legislature just enacted the Budget Bill. As a result, New York’s tax law has been significantly altered for the second time in two years.
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By Charles Capouet and Andrew Appleby
The Virginia Supreme Court held that the Arlington County Commissioner must defer to the Virginia Tax Commissioner regarding the methodology for calculating a local Business, Professional, and Occupational Licenses tax (“BPOL”) deduction. Arlington County levies a BPOL tax based on the gross receipts attributed to activities conducted at an…
By Sahang-Hee Hahn and Pilar Mata
The New Jersey Tax Court ruled for Toyota Motor Credit Corp. on three issues for New Jersey Corporate Business Tax purposes. Specifically, the court upheld the taxpayer’s gain calculation method using an upwardly adjusted federal tax basis; upheld the taxpayer’s departure from federal bonus depreciation rules; and set…
By Stephanie Do and Timothy Gustafson
The Texas Comptroller has filed a reply supporting its petition for review to the Texas Supreme Court in Titan Transp., LP v. Combs, 433 S.W.3d 625 (Tex. App. 3rd 2014). The taxpayer in Titan was in the business of hauling, delivering and depositing aggregate at construction sites, providing…
By Douglas Mo and Zachary Atkins
The California Court of Appeal held that the San Mateo County Assessor illegally assessed the intangible assets of the Ritz-Carlton Half Moon Bay Hotel. This is the first appellate decision to follow Elk Hills Power, LLC v. Board of Equalization, 57 Cal.4th 593, 304 P.3d 1052 (2013) (reported…
