Minnesota

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The Minnesota Supreme Court held that the state’s standard apportionment method did not fairly reflect the taxpayer’s net income allocable to the state, reversing the Tax Court’s ruling. The taxpayer, a national financial institution, transferred its loan portfolios to two newly formed partnerships. For apportionment purposes, Minnesota requires financial institutions to include loan interest in…

By Debra Salvato and Scott Wright

The Minnesota Tax Court recently held that the annual limitation on net operating losses of an acquired corporation is to be applied only once to a taxpayer’s pre-apportioned income. The taxpayer, Sinclair Broadcast Group, Inc., acquired a company with significant losses to which Section 382 limitations applied. The Commissioner…

By Samantha Trencs and Jeff Friedman

The Minnesota Supreme Court respected a foreign entity’s federal check-the-box election for the purpose of determining which entities were included in the Minnesota combined franchise tax reports. The court held that including the income and apportionment factors of a foreign entity that elects under federal tax law to be…

By Jeff Friedman and Stephanie Do

A new landmark sales tax statute has been adopted in Minnesota, which expands sales tax collection requirements to those retailers that sell their goods on certain “marketplaces.” Generally, only a retailer that is physically present in a state is required to collect and remit the state’s sales tax. The…

By Alla Raykin andf Eric Coffill

The Minnesota Supreme Court upheld the Minnesota Tax Court’s award of attorney’s fees to a taxpayer that had challenged the Minnesota Commissioner of Revenue’s assessment of sales and use tax. The Minnesota Supreme Court affirmed the Tax Court decision, because it reasonably concluded that the Commissioner’s additional use tax…

By Hanish Patel and Amy Nogid

The Minnesota Supreme Court held that Minnesota’s adoption of the Multistate Tax Compact (Compact) did not create a binding contractual obligation and, as a result, the state’s subsequent repeal of the Compact’s alternative apportionment election provision was not prohibited as unconstitutionally impairing contractual obligations. As such, the taxpayer was…

By Derek Takehara and Andrew Appleby

The Minnesota Supreme Court upheld the Minnesota Department of Revenue’s imposition of sales tax on a software company’s sale of partially customized software because the taxpayer failed to separately state customization charges on customer invoices. The taxpayer licensed software that analyzed information on retailers’ cash registers. The taxpayer always…

Minnesota Sales Tax Fact Sheet No. 177, 07/01/2014

The Minnesota Department of Revenue updated its Sales Tax Fact Sheet on digital products to explain that webinars (electronically accessed live or prerecorded audio and audiovisual presentations) are exempt from tax provided the following three requirements are met:

(1) Admission to the in-person presentation is not subject…