Shaking things up in state and local tax
Shaking things up in state and local tax
By Zack Atkins and Eric Coffill
A Virginia trial court held that royalties paid to related members that are reported to, but not taxed by, other states do not qualify for the exception to the state’s corporate income tax addback statute. In granting summary judgment in favor of the Virginia Department of Taxation, the court…
By Stephanie Do and Carley Roberts
The U.S. Court of Appeals for the Eleventh Circuit affirmed dismissal of a taxpayer’s complaint, arising from the Alabama Department of Revenue’s assessment and collection of state income tax, for lack of subject matter jurisdiction under the Tax Injunction Act (TIA). The court held that the TIA prohibited…
By Todd Betor and Eric Coffill
On January 20, a Denver trial court ruled that Agilent Technologies World Trade, Inc. (World Trade), a holding company with no property or payroll of its own, cannot be included in its parent’s combined corporate income tax return. The court found that World Trade did not meet the definition…
By Elizabeth Cha and Charlie Kearns
Effective for tax years beginning on or after January 5, 2016, the Illinois Department of Revenue adopted amendments to 86 Ill. Adm. Code Sec. 100.3380 that establish special rules for the inclusion in the Illinois sales factor of certain (1) income, gains and losses from hedging transactions; and (2)…
By Hanish Patel and Open Weaver Banks
The Magistrate Division of the Oregon Tax Court held that an insurance company’s gain from the sale of a subsidiary and income from a holding company both constituted nonbusiness income. The court found that the acquisition and sale of a 40% owned subsidiary that operated as a third-party…
By Olga Goldberg and Marc Simonetti
The California Superior Court struck down a regulation that imposed a de facto ban on contingent fee arrangements between businesses and consultants applying for the California Competes tax credit. The Court ruled that the regulation improperly exceeded the scope of the related statute. Ryan U.S. Tax Services, LLC v.
Over the last decade, multistate employers have witnessed a blizzard of state enforcement efforts of their nonresident withholding requirements. During that same time, large business tax departments have been snowed under by internal auditors’ questions of policies and procedures related to state nonresident withholding compliance. Even the U.S. Congress has shown an interest in plowing…
When a company undertakes a financing transaction, federal and state income tax considerations most frequently take priority in the tax department. In certain financing transactions, however, one would be remiss to ignore potential sales tax issues that can be traps for the unwary.
Reprinted from the Journal of Multistate Taxation and Incentives (Thomson Reuters/Tax &…
By Stephen Burroughs and Jonathan Feldman
The Indiana Tax Court granted summary judgment to Columbia Sportswear USA Corp., (“Columbia”), determining that: (1) Indiana’s alternative apportionment statute did not permit the Department to equitably adjust Columbia’s tax base; and (2) Indiana’s standard sourcing rules clearly reflected Columbia’s Indiana source income because transfer pricing studies supported Columbia’s…
By Liz Cha and Timothy Gustafson
In its first decision on combined unitary reporting since Vermont adopted combined reporting in 2006, the Vermont Supreme Court held that the AIG insurance group was not unitary with its wholly owned ski resort subsidiary, Stowe Mountain Resort. Applying the U.S. Supreme Court’s test for unity articulated in Mobil…
