Shaking things up in state and local tax
Shaking things up in state and local tax
By Kathryn Pittman and Timothy Gustafson
The Oklahoma Supreme Court held Oklahoma’s deduction for capital gains arising from the sale of a company headquartered in the state for three or more years does not violate the dormant commerce clause of the U.S. Constitution. The taxpayer, a California company with its headquarters in Florida, sold…
The New York State Governor and Legislature recently enacted the 2014-2015 New York State Budget, Senate Bill 6359-D and Assembly Bill 8559-D (Budget), which results in the most significant overhaul of New York’s franchise tax on corporations in decades. In this edition of New York Tax Reform Made Easy, we will address the creation of the Prior Net Operating Loss deduction.
Continue Reading New York Tax Reform Made Easy: Net Operating Loss
By Madison Barnett and Timothy Gustafson
In the first appellate decision arising from a Texas Margin Tax audit, the Texas Court of Appeals ruled in favor of the taxpayer, holding that a combined group’s eligibility for the cost of goods sold (COGS) deduction is determined on a group-wide rather than a separate-entity basis. The Comptroller…
By Jessica Kerner and Andrew Appleby
The Virginia Tax Commissioner concluded that a taxpayer was not permitted to deduct a portion of the royalties it had paid to an affiliate by narrowly construing the “subject to tax” exception to the state’s addback statute. This exception provides that the deduction will be permitted if the “corresponding…
By Mary Alexander and Andrew Appleby
The Indiana Department of Revenue disallowed a taxpayer’s deduction for interest expenses accrued to a subsidiary because the Department considered the loan a sham. Unless eligible for an exemption under Ind. Code § 6-3-2-20(c), a taxpayer that is subject to Indiana’s adjusted gross income tax is required to add…
By Todd Betor and Andrew Appleby
The Indiana Department of Revenue issued a Letter of Findings denying a taxpayer’s deductions for certain intercompany payments to a subsidiary management company. The taxpayer and its subsidiary management company (Management Co.) entered into an intercompany agreement based on a federal income tax transfer pricing study, which endorsed the…
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 Mary Alexander and Prentiss Willson
The Oklahoma Court of Appeals held that retroactive relief applied to a facially unconstitutional capital gains deduction. The court previously held that the capital gains deduction set forth in 68 O.S. §238(d) discriminated on its face against interstate commerce because the holding period for out-of-state companies was longer than…
The Kansas Attorney General issued an opinion in which it concluded that passing proposed legislation during the 2013 legislative session to amend legislation enacted in 2012 would not result in an unconstitutional retroactive tax increase. The proposed legislation, if signed into law, would define the tax basis for sales of business interests or shares, eliminate credits…
More than a decade into the case, AT&T’s challenge to the constitutionality of Mississippi’s dividends received deduction is over. On September 6, the Mississippi Supreme Court invalidated on procedural grounds the trial court’s 2006 decision finding that the dividends received deduction was unconstitutional. Mississippi’s dividends received deduction is limited to dividends paid from subsidiaries doing…
