The Louisiana Court of Appeal reversed and remanded Bridges v. Polychim USA, Inc., No. 581,759, a case in which the trial court held that an out-of-state corporation was subject to the franchise tax by virtue of its indirect ownership interest in a general partnership doing business in Louisiana. Bridges v. Polychim USA, Inc.
franchise tax
New York City Legislation Enacts General Corporation Tax Reform
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Posted in New York, Policy and Legislation
On April 13, 2015, Governor Andrew Cuomo signed New York’s 2015-2016 budget legislation, which, among other changes, conforms the New York City general corporation tax to the most significant changes from last year’s New York State corporation franchise tax reform.
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A Real Loss for New York: ALJ Rejects Hypothetical Application of Net Operating Loss
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Posted in New York, Policy and Legislation
By Nicole Boutros and Open Weaver Banks
A New York State Division of Tax Appeals Administrative Law Judge (ALJ) held that for banking franchise tax purposes a taxpayer did not have to utilize a net operating loss (NOL) carryover in a year in which the taxpayer did not pay tax on its entire net income…
Georgia Tax Tribunal Says What Texas Comptroller Won’t
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By Zachary Atkins & Jonathan Feldman
The Georgia Tax Tribunal held that the Texas Franchise Tax (the “TFT”) is a tax “on or measured by income” and allowed a Georgia resident, who indirectly owned an interest in a pass-through entity, to adjust his federal adjusted gross income for the amount of the entity’s income…
You’re Gonna Have to Do More Than That: Passive Investment in California Limited Liability Company Insufficient to Meet Statutory Nexus Threshold
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Posted in California
By Evan Hamme and Timothy Gustafson
A California Superior Court held that passive membership in a limited liability company (LLC) is insufficient to meet California’s statutory “doing business” standard. In Swart Enterprises, Inc. v. California Franchise Tax Board, an Iowa corporation with no business activities or physical presence in California invested in a fund organized
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Developmental Costs: Texas Comptroller Rules Essential Preparatory Costs Cannot Be Accounted for in Apportionment Factor
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Posted in Policy and Legislation
By Ted Friedman and Prentiss Willson
The Texas Comptroller determined that for Texas franchise tax purposes the apportionment factor of an out-of-state taxpayer engaged in the provision of technical training could not be adjusted to account for certain costs incurred in preparing and marketing the training sessions. The training sessions that were sold in Texas…
Will Petition Flow Through, Too? Texas Comptroller Seeks Review on Subcontractor Payments for Franchise Tax Purposes
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Posted in Noteworthy Cases
By Stephanie Do and Timothy Gustafson
The Texas Comptroller has filed a reply supporting its petition for review to the Texas Supreme Court in Titan Transp., LP v. Combs, 433 S.W.3d 625 (Tex. App. 3rd 2014). The taxpayer in Titan was in the business of hauling, delivering and depositing aggregate at construction sites, providing…
Tennessee “Volunteers” Taxpayer for Alternative Apportionment
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Posted in Digital Economy, Noteworthy Cases
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…
A Pinch of SALT: Heads They Win, Tails You Lose: New York Decombination and Discretionary Adjustments
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Posted in New York, Policy and Legislation
In their article for State Tax Notes, “Heads They Win, Tails You Lose: New York Decombination and Discretionary Adjustments,” Sutherland attorneys Marc A. Simonetti, Andrew D. Appleby and Sahang-Hee Hahn assert that the New York State Department of Taxation and Finance applies its combined reporting and discretionary authority provisions arbitrarily to maximize its tax…
New York Tax Reform Made Easy: A Recap
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Posted in New York, Policy and Legislation
On March 31, 2014, New York State Governor Andrew Cuomo signed into law the 2014-2015 New York State Budget (Budget), which results in the most significant overhaul of New York’s franchise tax in decades. The Budget brings about monumental change for corporate taxation in New York by eliminating the Bank Franchise Tax (Article 32), subjecting…