income tax

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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…

In a decision sure to give Pennsylvania legislators and the Department of Revenue indigestion before their big Thanksgiving meals, the Commonwealth Court held that Pennsylvania’s net loss carryover deduction cap violated Pennsylvania’s Uniformity Clause because it resulted in disparate treatment of similarly situated taxpayers based on the size of the business. 

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By Nick Kump and Timothy Gustafson

The Wisconsin Tax Appeals Commission overturned a $2.4 million assessment against an intellectual property (IP) holding company, ruling that the company’s income-producing activities for Wisconsin sales factor purposes – IP licensing and related activities – occurred entirely outside of the state. The taxpayer, a wholly owned subsidiary of the…

By Zack Atkins and Timothy Gustafson

The Oregon Tax Court held that the Multistate Tax Compact (Compact), which allows for an equally weighted, three-factor apportionment formula, was an illusory contract and its terms had been effectively disabled by the Oregon Legislature. The statute in question, ORS 314.606, provides that in case of conflict the provisions…

By Michael Penza and Timothy Gustafson

The Utah State Tax Commission ruled that a Utah-based manufacturing and marketing company’s payroll factor must include compensation paid to a third-party “professional employer organization” (PEO) pursuant to a lease agreement for employees working at the taxpayer’s Utah facilities. The employees signed employment agreements with the PEO, and the…

In a recent unpublished decision, Residuary Trust A v. Director, Division of Taxation (Kassner), the New Jersey Appellate Division relied on the “square corners doctrine” to hold that the New Jersey Division of Taxation was prohibited from imposing tax for the 2006 tax year based on a policy change not announced until 2011. In…