Shaking things up in state and local tax
Shaking things up in state and local tax
By Christopher Chang and Pilar Mata
The New Jersey appeals court ruled that BIS LP, Inc. (BIS) was entitled to receive a New Jersey Corporation Business Tax (CBT) refund in the ongoing BIS litigation saga. In 2011, BIS, an out-of-state limited corporate partner, prevailed before the appeals court, securing a decision that found BIS lacked…
By Zachary Atkins and Timothy Gustafson
The New Jersey Tax Court held that a mobile telecommunications service provider was not required to reimburse its customers before seeking a $32 million refund of erroneously collected sales tax. As part of a federal court-approved 2010 settlement agreement involving AT&T Mobility and its subsidiaries and affiliates, New…
By David Pope and Timothy Gustafson
The New Jersey Tax Court drafted a letter to the Superior Court of New Jersey, Appellate Division, to amplify the Tax Court’s August 9, 2013, taxpayer-favorable decision applying New Jersey’s “Throw-Out Rule” in Lorillard Licensing Co. LLC v. Division of Taxation, Docket No. A-2033-13T1. In Lorillard, the…
By David Pope and Andrew Appleby
The New Jersey Tax Court denied three summary judgment motions in the ongoing Whirlpool litigation relating to nexus and the “Throwout Rule.” In 2011, the New Jersey Supreme Court held that New Jersey’s Throwout Rule was facially constitutional but narrowed the application of the rule to untaxed receipts from…
By David Pope and Prentiss Willson
The New Jersey Division of Taxation concluded in a technical bulletin that sales of cloud computing services are not subject to sales and use tax in New Jersey. Although this is not a change to the Division’s position, the bulletin specifically identifies software as a service (SaaS), platform as…
By David Pope and Timothy Gustafson
The abatement of late payment and tax amnesty penalties was upheld in favor of several United Parcel Services (UPS) subsidiaries by the New Jersey Superior Court, Appellate Division. The taxpayers and their parent company utilized a cash management system designed to ensure that all subsidiaries had access to cash…
The U.S. Court of Appeals for the Third Circuit took a bite out of a bagel store’s bankruptcy petition by holding that sales taxes are non-dischargeable “trust fund” taxes rather than excise taxes. In Re: Michael Calabrese, Jr., No. 11-3793 (3d. Cir. July 20, 2012). After not having enough dough to pay their debts…
New Jersey amended its escheatment laws on June 29, 2012. Some of the notable amendments include:
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On July 28, 2011, the New Jersey Supreme Court denied a taxpayer’s claim that New Jersey’s Throwout Rule (which excludes certain sales from the denominator of the sales apportionment factor) is facially unconstitutional. Whirlpool Props., Inc. v. Div. of Tax’n, Case No. 066595 (N.J. July 28, 2011). However, the court held that the application…
Yesterday, the New Jersey Supreme Court heard oral arguments in the Whirlpool case. Whirlpool Properties, Inc. v. Div. of Taxation, Docket A-25-10 (N.J. Supreme Court argued May 4, 2011). Whirlpool argued that the New Jersey “Throwout Rule” is facially unconstitutional because it is designed to tax extraterritorial income. The New Jersey Throwout Rule required taxpayers…
