Shaking things up in state and local tax
Shaking things up in state and local tax
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…
The Maine Board of Tax Appeals (Board) disallowed a resident individual taxpayer’s claim for a Maine income tax credit for taxes paid to Connecticut by the taxpayer’s limited liability company (the Company). The Company, treated as an S corporation for federal purposes, paid Connecticut’s entity-level tax on pass-through entities (a tax that operates as a…
After losing at trial, the Maine State Tax Assessor is now arguing to the state’s Supreme Judicial Court that sales tax applies to carrier subsidies received by Apple on its sales of iPhones bundled with service contracts. During the years in issue, Apple sold iPhones to its customers at a reduced price when the customers…
The Maine Supreme Judicial Court recently held that a taxpayer was not entitled to alternative apportionment for approximately $3 billion in gains earned from the sale of a business unit.
The taxpayer was a food and beverage manufacturer that sold its frozen pizza division in 2010 for $3.6 billion. The taxpayer took the position on…
With the threat of COVID-19 looming, several state legislatures will halt or temporarily suspend their legislative sessions, including: Colorado, Delaware, Connecticut, Georgia, Kentucky, Maine, Maryland, New Hampshire, and Vermont. For many states, this is an unprecedented move while in others, the legislature has not adjourned early since the Civil War. Other state legislatures, like California’s…
By Chris Beaudro and Carley Roberts
On June 21, 2017, the Maine Legislature overrode the Governor’s veto and passed legislation requiring the collection of sales tax by remote sellers. The legislation requires remote sellers to collect Maine sales tax on their sales into the state if the seller’s gross revenue from sales into Maine exceeds…
By Charles Capouet and Tim Gustafson
On June 15, 2017, the Maine Supreme Judicial Court held that property tax recovery charges and carrier cost recovery charges imposed by a telecommunications service provider of long distance telephone service on its customers were not subject to service provider tax for the tax years 2008 – 2010. The…
By Mary Alexander and Andrew Appleby
The Maine Board of Tax Appeals determined that a non-itemized installation charge was subject to the service provider tax (SPT) when a portion of the charge included the installation of telecommunications equipment. The taxpayer, an Internet service provider, invoiced customers a single “installation charge” for various services, which included…
By Derek Takehara and Andrew Appleby
Maine Revenue Services issued a Guidance Document for C-corporations regarding state modifications to federal net operating losses (NOLs). In light of Maine’s inconsistent conformity with the federal NOL rules, the guidance contains helpful explanations and examples of Maine’s NOL methodology through the years. For federal tax purposes, losses generally…
Despite the overwhelming business opposition to “throwout” sales factor apportionment rules and New Jersey’s recent repeal of its “throwout” rule, Maine is now bucking the trend and adopting a new “throwout” rule. Effective for 2010 and subsequent years, Maine adopted the Finnigan methodology for computing the sales factor for a combined return and to replace its “throwback” rule with the “throwout” rule.
Under the new Finnigan methodology of Code Me. R. 810 for determining the numerator of the sales factor in a combined report, “total sales of the taxpayer” in Maine now includes sales of the taxpayer and sales of any other entity included in a combined return, regardless of whether those entities themselves have nexus with Maine. The adoption of Finnigan applies to both unitary groups that have elected to file a single combined return and those that file separate returns utilizing combined apportionment. If separate returns are filed, each taxpayer’s return will include in the numerator of the sales factor its own Maine sourced sales as well as a portion of the Maine sourced sales of those entities in the unitary group that do not have nexus with Maine.Continue Reading Throw Out the Throwback: Maine Replaces “Throwback” with “Throwout” and Adopts Finnigan
