Shaking things up in state and local tax
Shaking things up in state and local tax
On December 9, the U.S. Supreme Court heard oral arguments in the last of three state and local tax cases that it accepted this term – Alabama Department of Revenue v. CSX Transportation, Inc. (CSX II), a case that had previously been before the Supreme Court. CSX Transportation…
By Suzanne Palms and Pilar Mata
The Washington Department of Revenue determined that taxpayers have a right to rely on written but not oral instructions from the Department of Revenue. The taxpayer operated an Internet marketing business and sold its services to customers both inside and outside the state. In June 2011, the taxpayer amended…
By Stephen Burroughs and Andrew Appleby
The Tennessee Court of Appeals held that the Commissioner had the authority to require Vodafone, a wireless communications provider, to use an alternative apportionment method for Tennessee franchise and excise tax purposes. Vodafone used Tennessee’s statutory cost-of-performance (COP) method to source its telecommunication service receipts. Using Tennessee’s statutory COP…
By Jonathan Maddison and Andrew Appleby
The Commonwealth Court of Pennsylvania held that tax records detailing yearly totals of room rental tax and other occupancy data submitted by hotel taxpayers to a locality were not subject to disclosure under Pennsylvania’s Right-to-Know Law (RTKL). A newspaper, under the RTKL, requested that Lancaster County provide detailed tax…
By Scott Booth and Andrew Appleby
The Massachusetts Governor released his proposed fiscal year 2015 budget, which includes a tax provision that is targeted directly at the insurance industry. Currently, income earned by pass-through entities, such as partnerships, owned by licensed life or property and casualty insurers is excluded from Massachusetts income tax because…
By Nicole Boutros and Pilar Mata
The U.S. Court of Appeals for the Second Circuit determined that dial-up internet services were taxable local telephone services when analyzing an Internal Revenue Service bankruptcy claim for federal excise taxes (FET). The taxpayer, WorldCom, Inc., purchased central-office-based remote access (COBRA) services from local telephone companies to provide internet…
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 Todd Betor and Pilar Mata
Oregon’s $29 million corporate excise tax claim against the taxpayers’ parent company was held to violate both the Due Process and Commerce Clauses of the U.S. Constitution by the U.S. Bankruptcy Court for the District of Delaware. Oregon claimed that Washington Mutual, Inc. (WMI) was liable for its subsidiaries’…
By Zachary Atkins and Jack Trachtenberg
The Commonwealth notched another win before the Massachusetts Appeals Court in a case of first impression affirming corporate excise tax assessments based on a disallowance of the taxpayers’ interest and royalty expenses for pre-addback (pre-2002) and addback tax years (post-2001). Under a clear and convincing evidence standard, the court…
The U.S. Court of Appeals for the Third Circuit took a bite out of a bagel store’s bankruptcy petition by holding that sales taxes are non-dischargeable “trust fund” taxes rather than excise taxes. In Re: Michael Calabrese, Jr., No. 11-3793 (3d. Cir. July 20, 2012). After not having enough dough to pay their debts…
