Shaking things up in state and local tax
Shaking things up in state and local tax
By Charles Capouet and Timothy Gustafson
The Mississippi Chancery Court held that the state’s dividend exclusion statute is unconstitutional because it violates the Commerce Clause of the U.S. Constitution. The statute excludes from a taxpayer’s gross income intercompany dividends received from domestic affiliates doing business and filing income tax returns in Mississippi. In so doing,…
By Suzanne Palms and Tim Gustafson
In direct response to the Mississippi Supreme Court’s decision in Equifax, Inc. v. Miss. Dep’t of Revenue, wherein the court upheld the Department of Revenue’s use of market-based sourcing despite the taxpayer’s use of cost-of-performance sourcing in compliance with the governing statute, Mississippi’s Governor signed House Bill (HB)…
By Madison Barnett and Prenitss Willson
The Mississippi Supreme Court held that a casino operator was entitled to use tax credits—specifically, gambling license fee credits—earned by one combined group member to offset the entire combined group’s liability. Mississippi is generally a separate return state, but taxpayers may elect to file a post-apportionment, nexus-combined return. The…
By Maria Todorova and Timothy Gustafson
The Mississippi Supreme Court denied the taxpayer’s motion for rehearing in Equifax, Inc. v. Mississippi Dep’t of Revenue, a case on which we previously reported. The denial leaves undisturbed its June holding, reversing the Mississippi Court of Appeals’ decision, which held the taxpayer bears the burden of…
By Stephen Burroughs and Andrew Appleby
The Mississippi Supreme Court held that the taxpayer bears the burden to prove that an alternative apportionment method imposed by the State is arbitrary and unreasonable. Rejecting the taxpayer’s original cost-of-performance filing position, the Department of Revenue applied an alternative apportionment method utilizing market-based sourcing. On appeal, the Chancery…
More than a decade into the case, AT&T’s challenge to the constitutionality of Mississippi’s dividends received deduction is over. On September 6, the Mississippi Supreme Court invalidated on procedural grounds the trial court’s 2006 decision finding that the dividends received deduction was unconstitutional. Mississippi’s dividends received deduction is limited to dividends paid from subsidiaries doing…
In a case that is interesting both substantively and procedurally, the Mississippi Supreme Court held that a consumer lending subsidiary of a national bank was subject to the Mississippi Finance Company Privilege Tax. Miss. Dep’t of Revenue v. Pikco Finance, Inc., 2012 WL 3031281 (Miss. July 26, 2012). In ruling for the state, the…
Understanding states’ various approaches to accountant-client privileges can make the difference in protecting communications from disclosure in litigation. In this edition of A Pinch of SALT, Sutherland SALT’s Pilar Mata and Melissa Smith examine the scope and breadth of accountant-client privileges that have been adopted by some states.
