Shaking things up in state and local tax
Shaking things up in state and local tax
By Evan Hamme and Charlie Kearns
Purchases of “data center equipment for assembly, use, or consumption in the operations of a qualified data center” on or after January 1, 2016, are exempt from Michigan sales and use tax. M.C.L. §§ 205.54ee, 205.94cc; see generally Notice Regarding Data Center Exemption, Feb. 5, 2016…
By Hanish Patel and Jonathan Feldman
The Georgia Department of Revenue held a public hearing on a proposed regulation amendment that would materially affect the use of direct pay permits in Georgia. The proposed regulation would cause all current permits to expire on December 31, 2016, and require all current holders to reapply and agree…
Applying the “true object” test to the taxpayer’s web-based services, the Tennessee Department of Revenue ruled that charges for granting access to the taxpayer’s website for purposes of obtaining information would not be subject to sales tax. While the access to web-based services is tax-exempt as a sale of…
By Hanish Patel and Open Weaver Banks
A New York Division of Tax Appeals Administrative Law Judge (ALJ) held that an electricity producer’s purchases, installations and repairs of “step-up transformers” were not subject to sales and use tax because the transformers were “used directly” in the production of electricity. Step-up transformers are used to “step…
By Samantha Trencs and Madison Barnett
The Rhode Island Supreme Court held that a wind turbine owned by a non-utility private party was exempt from personal property tax under a manufacturing exemption because the turbine converted wind into electricity. The court rejected the taxing authority’s argument that the turbine was ineligible for the exemption because…
By Mike Kerman and Maria Todorova
The Illinois Appellate Court held that a property tax exemption for nonprofit hospitals which provided certain services or subsidies equal in value to their estimated property tax liabilities was facially unconstitutional because it did not require exclusive charitable use of the property, as prescribed under the Illinois Constitution. Carle …
By Michael Penza and Todd Lard
The Wyoming Board of Equalization (BOE) held that purchases of chemicals by an electric utility operating coal-fired electric generation plants were subject to sales tax because the utility was not a manufacturer or a processor. The Board found that the utility was not a manufacturer because it did not…
In a significant rebuff of the California State Board of Equalization (BOE), the California Second District Court of Appeal held that a manufacturer’s sale of software on tangible media was exempt from sales tax under the technology transfer agreement (TTA) statutes. Lucent Technologies, Inc. v. State Bd. of Equalization, No. B257808, 2015 WL 5862533.
By Mike Kerman and Charlie Kearns
The Indiana Department of Revenue (Department) found that a medical research company that purchased software licenses was entitled to an exemption from use tax for purchases of taxable computer software as long as it could show the licenses were ultimately used outside of Indiana. The Department added that an…
In his State of the State address at the beginning of the year, Texas Governor Greg Abbott tasked the Legislature with enacting meaningful business tax relief. The Legislature responded by reducing the franchise (also called the margin) tax rate and creating new exemptions and incentives for sales tax. At the same time, however, the Legislature…
