The Wisconsin Tax Appeals Commission ruled that an out-of-state travel agent that used independent travel consultants in Wisconsin was doing business in Wisconsin and is responsible for the Wisconsin franchise tax. The company argued, among other things, that it was in the business of selling SaaS that did not produce income taxable in Wisconsin; however,
franchise tax
Prepare for takeoff: Minnesota’s minimum fee is partially preempted by federal law prohibiting taxation of airline gross receipts
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…
Governor Hochul releases New York budget Briefing Book with tax proposals
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.…
Eco-friendly but not so taxpayer friendly: Wisconsin Tax Appeals Commission finds automaker’s sale of environmental credits generates apportionable income
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…
It’s alive: the Illinois franchise tax and its impact on M&A
In this installment of A Pinch of SALT for Tax Notes State, Eversheds Sutherland attorneys Breen Schiller, Eric Tresh and Jeremy Gove explore the Illinois franchise tax and recommend that taxpayers reacquaint themselves with the mechanics of the tax to understand the potential pitfalls of various corporate transactions.
Check Your (Broadband) Credit Score: Mississippi Supreme Court Approves Telecom Companies’ Computation of Broadband Tax Credits
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…
Louisiana Loses Jeopardy!
A Louisiana court of appeals affirmed a trial court decision dismissing for lack of personal jurisdiction the Louisiana Department of Revenue’s (“Department”) petition to collect corporate and franchise taxes on over $3.6 million in royalties from nonresident television production company Jeopardy Productions Inc. (“Jeopardy”). Jeopardy earned royalties from Louisiana between 2011 and 2014 through agreements…
No Double Trouble Here – Michigan Court of Appeals Holds Merged Banks Entitled to Refund as Single Taxpayer
The Michigan Court of Appeals reversed and vacated the Tax Tribunal’s order and held that merged entities that are a unitary business group (“UBG”) must be treated as single entity for purposes of calculating the franchise tax and that corporate income tax credits carried over to the new entity. The taxpayer, Comerica, Inc., was a…
New York Continues to Disregard Taxpayer’s Reliance on Disregarded Entity Rules
The New York State Tax Appeals Tribunal affirmed a New York State Division of Tax Appeals determination denying a refund claim to a taxpayer that sought to apply the income sourcing rules for registered broker-dealers to receipts from its separate investment advisory business. The taxpayer structured its broker-dealer operations and investment advisory operations into two…
California Franchise Tax Board Provides Extension for Taxpayers
The California Franchise Tax Board just issued Notice 2020-02, providing an extension to July 15th for taxpayers to file income/franchise tax refund claims, protests, or appeals and petitions for rehearing at the Office of Tax Appeals that would normally have statutory due dates during the “postponement period” of Mar. 12, 2020 to July 15,…