On April 2, 2026, the Supreme Judicial Court of Maine ruled that a liquor supplier was subject to Maine income tax and owed nearly $750,000 in state income tax, penalties, and interest for the 2011-2017 tax years.
The liquor supplier argued that it was not subject to income tax because it did not have nexus
Mind the warehouse: California OTA says inventory storage alone can trigger “doing business”
By John Ormonde on
Posted in California, Sales and Use Tax
The California Office of Tax Appeals held that storing inventory at a third-party warehouse constitutes “doing business” for income and franchise tax purposes.
The taxpayer was a Pennsylvania-based corporation making online sales of apparel through a third-party digital marketplace. The taxpayer also contracted with the marketplace to hold and ship inventory from warehouses (fulfillment centers)…
Washington Court of Appeals gives no credit to bank’s physical presence and apportionment arguments
By Ted Friedman & Sebastian Iagrossi on
Posted in Income Tax
The Washington Court of Appeals affirmed a Board of Tax Appeals decision that found an out-of-state bank had a sufficient physical presence in the state to be subject to Washington’s Business & Occupation (B&O) tax. The bank did not have any employees or property in Washington, but issued credit cards, including private label credits cards…
Massachusetts Supreme Judicial Court holds Massachusetts could not enforce pre-Wayfair computer cookie use tax collection law
By Jeffrey Friedman, Charles Capouet & David Jasphy on
Posted in Digital Economy
On December 22, 2022, the Massachusetts Supreme Judicial Court held that a taxpayer’s use of computer cookies did not constitute substantial nexus with the state for periods prior to the United States Supreme Court’s decision in South Dakota v. Wayfair, Inc. The taxpayer sold auto parts entirely online and utilized cookies to track customers…
North Dakota updates guidance on Wayfair small seller exception
By Ted Friedman, Laurin E. McDonald & Jeremy Gove on
Posted in Digital Economy
The North Dakota Tax Commissioner updated its website to explain North Dakota’s Wayfair small seller exception to collecting and remitting state and local sales tax on sales made into the state. Consistent with North Dakota statutes, the website states that, for remote sellers with no physical presence in the state, the exception for small sellers…
New York City updates business corporation tax nexus standards
By Ted Friedman, Elizabeth Cha & Jeremy Gove on
Posted in New York
On August 31, 2022, New York Governor Kathy Hochul signed S.B. 9454, which aligns New York City’s nexus standards with New York State’s economic nexus standards. For tax years beginning on or after January 1, 2022, businesses have nexus with New York City and are subject to the City’s business corporation tax if they have…
Stale gum: Oregon Tax Court denies P.L. 86-272 protection to cigarette manufacturer
By Charles Capouet & John Ormonde on
Posted in Income Tax
The Oregon Tax Court, Regular Division, held that P.L. 86-272 did not preclude Oregon from imposing its excise (income) tax on an out-of-state manufacturer of cigarettes and other tobacco products based on two activities. First, the court held that the manufacturer’s mandate that the in-state wholesalers accept product returns was not a protected activity. The…
Pennsylvania codifies economic nexus standard
By Jeremy Gove, Alla Raykin & Jonathan Feldman on
Posted in Digital Economy
Pennsylvania recently codified the state’s corporate income tax economic nexus threshold, making corporations with no physical presence in Pennsylvania responsible for corporate income tax if they have sales of $500,000 or more per year sourced to Pennsylvania for tax years beginning after December 31, 2022. The legislation also includes a non-exhaustive list of other nexus…
Massachusetts court of last resort to hear cookie nexus case for pre-Wayfair period
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
The Massachusetts Supreme Judicial Court has accepted a direct appeal from an internet retailer contesting the Department’s position that the in-state presence of cookies and apps were sufficient to satisfy the physical presence nexus standards in place prior to the US Supreme Court’s decision in South Dakota v. Wayfair, Inc. The Department assessed use…
Nexus news – recent Due Process and P.L. 86-272 cases
By Breen Schiller on
Posted in In the News
In this column for Journal of State Taxation, Eversheds Sutherland Partner Breen Schiller discusses two important nexus defenses, Due Process Clause and P.L. 86-272, as well developments in this area.