On November 2, 2017, Republicans in the House of Representatives released their much-anticipated tax reform bill. The Tax Cuts and Jobs Act proposes numerous changes to the Internal Revenue Code, many of which will have an impact on taxpayers’ state and local tax liabilities.

  • Most states conform to the federal income tax base —at least

On October 18, 2017, the Pennsylvania Supreme Court issued its decision in Nextel Communications of the Mid-Atlantic, Inc. v. Pennsylvania Department of Revenue, in which the court held that the state’s flat $3 million cap on net operating loss carryforwards violates the state constitution’s Uniformity Clause. Key considerations from the case include:

  • The $3

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 Michael Penza and Andrew Appleby

The California Court of Appeal held that California’s disparate treatment of intrastate and interstate unitary businesses discriminated against interstate commerce. California requires taxpayers engaged in a unitary business within and without California to calculate their taxable income using combined reporting, but provides taxpayers engaged in a unitary business wholly

By Zachary Atkins and Andrew Appleby

The Indiana Department of State Revenue upheld an audit determination that an intellectual property arrangement between a parent company and its wholly owned subsidiary distorted the parent company’s income. The parent company, a separate-return filer for Indiana, adjusted gross income for tax purposes, and transferred to the subsidiary, in

By Derek Takehara and Andrew Appleby

The New Mexico Department of Taxation and Revenue granted a combined reporting group’s corporate income tax protest by allowing the group to claim a deduction for net operating losses (NOLs) that two of its members generated and reported previously on a separate entity basis. The taxpayer was the parent