income tax

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A Florida circuit court held for the Department of Revenue in a dispute over Florida’s apportionment formula applicable to companies providing transportation services in the state. Florida apportions income of transportation companies by multiplying the taxpayer’s income by a fraction, the numerator of which is “revenue miles in [Florida]” and the denominator of which is…

The New Jersey Superior Court, Appellate Division upheld the application of New Jersey’s 2020 amendment to its royalty addback regulation retroactively to tax years prior to the regulation’s amendment. In 2020, New Jersey amended its regulation (N.J. Admin. Code § 18:7-5.18) to delete geographical limitations in the addback exception for royalty payments made to a…

An Illinois appellate court held that a PepsiCo, Inc. subsidiary—Frito-Lay North America, Inc. (FLNA)—was not an 80/20 company excluded from PepsiCo’s unitary group. Illinois excludes 80/20 companies for the unitary group, where such companies have over 80% of their payroll and property from outside the United States. After a restructuring, PepsiCo created a single-member LLC…

The Massachusetts Appellate Tax Board (ATB) determined that a New Hampshire resident attorney, employed by a Massachusetts-based federal agency, was not entitled to a personal income tax refund for days he did not physically work in Massachusetts during the coronavirus pandemic.

In April 2020, Massachusetts implemented emergency regulation 830 CMR 62.5A.3, which required nonresident employees…

The Third Circuit Court of Appeals upheld a District Court’s dismissal of a taxpayer’s challenge to New Jersey’s partnership filing fee under the tax comity doctrine. The partnership filing fee was enacted by New Jersey in 2002 to offset the costs of reviewing and auditing partnership tax returns. The fee is a flat fee computed…

A California appellate court held that Proposition 39, which mandated single-sales factor apportionment, did not violate the single-subject rule. In 2012, California voters enacted Proposition 39, which established a program to promote the creation of clean energy jobs. It funded the program by eliminating the option for taxpayers to apportion its California tax based on…

Governor Glenn Youngkin has issued his proposed Virginia 2024 – 2026 Budget Bill. The Budget Bill would make three notable changes to Virginia’s tax structure, all of which would take effect on January 1, 2025: (1) increase the sales and use tax rate; (2) expand the sales and use tax base to digital products; and…

The Maine Supreme Judicial Court held that a prescription drug company’s income should be apportioned based on the location where its prescription drugs are received, rather than the headquarters locations of the health plans or employers paying for the drugs.

The drug company sought income tax apportionment based on a “market client basis,” arguing that…