Shaking things up in state and local tax
Shaking things up in state and local tax
By Chelsea Marmor and Madison Barnett
The California Court of Appeal upheld Comcast’s $2.8 million franchise tax refund. The court determined that: (1) Comcast and its subsidiary QVC were not unitary, such that QVC was properly excluded from Comcast’s combined group, and (2) a termination fee Comcast received from a failed merger constitutes apportionable business…
By Christopher Lutz and Jeff Friedman
On December 15, 2016, the Tennessee Joint Government Operations Committee held a hearing regarding the governor’s proposal to establish an economic nexus standard for the state sales tax. Under the proposal, remote sellers would be subject to collection obligations in the state if their Tennessee sales exceed $500,000. The…
By Hanish Patel and Amy Nogid
The Minnesota Supreme Court held that Minnesota’s adoption of the Multistate Tax Compact (Compact) did not create a binding contractual obligation and, as a result, the state’s subsequent repeal of the Compact’s alternative apportionment election provision was not prohibited as unconstitutionally impairing contractual obligations. As such, the taxpayer was…
The New York State Department of Taxation and Finance issued two advisory opinions determining that surplus lines insurance companies are subject to uncapped insurance franchise tax instead of premium tax.
…
The New York City Tax Appeals Tribunal reversed an administrative law judge (ALJ) and determined that a health maintenance organization (HMO) was subject to the New York City general corporation tax.
In Aetna, the parties stipulated that all the requirements for combination had been satisfied, so the sole issue was whether…
By Mike Kerman and Amy Nogid
The Texas Comptroller of Public Accounts concluded that a Texas-based national radio network must apportion its advertising receipts based on the ratio of radio stations that license and broadcast its programming from Texas compared to the total number of radio stations that license and broadcast such programming. The taxpayer…
By Nicole Boutros and Eric Coffill
The New York State Tax Appeals Tribunal determined that a taxpayer subject to the Article 32 bank franchise tax must use its net operating loss deduction to reduce its entire net income to zero in years in which the bank franchise tax was paid by the taxpayer on an…
Recently proposed Treasury regulations under IRC § 385 would create sweeping changes to the federal income tax treatment of related-party debt. The Proposed Regulations could also have far-reaching effects for state income tax purposes, particularly on the deductibility of intercompany interest expenses in separate company reporting states.
View the full Legal Alert.
By Elizabeth Cha and Scott Wright
The Texas Court of Appeals held that a seismic data gathering company was entitled to a cost of goods sold (COGS) deduction for costs of labor and materials incurred to acquire and process seismic data for its clients. Pursuant to Tex. Tax Code § 171.1012(i), a taxpayer may include…
By Charles Capouet and Andrew Appleby
A New York State Division of Tax Appeals ALJ determined that payments by a corporation to its captive insurance company did not qualify as deductible insurance premiums because the arrangement lacked risk shifting and risk distribution. The taxpayer primarily owned and operated convenience stores and gas stations, and insured…
