franchise tax

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Delaware bears an outsized importance for corporate America. While there are a number of reasons to incorporate in Delaware, Eversheds Sutherland attorneys Jeff Friedman and Jeremy Gove describe a significant downside – an annual franchise tax for the privilege of doing so. This article, published in Bloomberg Law, describes this Delaware tax that generates…

The Texas Court of Appeals for the Third District upheld the Comptroller of Public Accounts’ Franchise Tax apportionment rule as facially valid, including the provisions apportioning receipts to Texas where the seller ships or delivers property in Texas—regardless of whether the buyer is ultimately located in the state. 

The taxpayer, a company that transports and…

The Texas Comptroller of Public Accounts amended its franchise tax apportionment rule, as published in proposed form in the March 10 issue of the Texas Register. The rule, which is now final, discards the “receipt-producing, end-product act” test in light of Eversheds Sutherland’s litigation in Sirius XM Radio, Inc. v. Hegar. Taxpayers should consider…

The Tax Policy Division of the Texas Comptroller of Public Accounts issued guidance summarizing certain federal statutes and regulations related to Internal Use Software (IUS) that are now incorporated-by-references into Texas’ research and development (R&D) laws. Specifically, for purposes of the franchise tax R&D credit laws and the sales tax R&D exemption, the Comptroller incorporates-by-reference…

The Minnesota Tax Court ruled that the federal Anti-Head Tax Act (AHTA) preempts using Alaska Airlines’ gross receipts when calculating the Minnesota Franchise Tax Minimum Fee. The AHTA prohibits states from taxing gross receipts from air commerce or transportation. Minnesota’s Minimum Fee, imposed on taxpayers exercising a corporate franchise in the state, is calculated based…

On January 18, 2022, Governor Kathy Hochul released the fiscal year 2023 budget Briefing Book. While we are still waiting for the public release of accompanying legislation (i.e., the Budget Bill) and memoranda, the Briefing Book indicates that the Budget Bill will propose a variety of tax cuts targeting middle-class individuals and small businesses.…

The Wisconsin Tax Appeals Commission sided with the Department of Revenue, ruling that American Honda Motor Co.’s sale of environmental credits generated apportionable income for corporate income and franchise tax purposes. American Honda bought vehicles from related companies and resold them to car dealerships and other retailers in the U.S.

When American Honda sold its…

The Mississippi Supreme Court ruled that an affiliated group of telecommunications companies properly computed the Broadband Investment Credit in determining their franchise and income tax liabilities.  The Broadband Credit may be used by a taxpayer to offset up to 50% of the taxpayer’s tax liabilities in a given year.  The taxpayers filed separate Mississippi franchise…