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The New Jersey Tax Court ruled that the in-state activities of an out-of-state wholesale produce distributor were protected under Public Law 86-272 (P.L. 86-272), a federal law that prohibits states from imposing a net income tax on an out-of-state taxpayer.  The Taxpayer had no offices, property, employees or inventory in New Jersey, but it did…

On April 16, 2021, Governor Laura Kelly vetoed S.B. 50, which would require sales and use tax collection by marketplace facilitators and would set a remote seller tax collection threshold. Marketplace facilitators would be required to collect and remit these taxes if, during the current or immediately preceding calendar year: (1) the marketplace facilitator…

The Massachusetts Appellate Tax Board (“ATB”) granted summary judgement for taxpayer U.S. Auto Parts Network, Inc. (“U.S. Auto Parts”), abating the Department of Revenue’s sales and use tax assessment based on a finding that the online auto parts seller had acquired “cookie nexus” with the state. The Department’s economic nexus regulation, the “Internet Vendor Rule,”…

On December 4, 2020, the Washington Department of Revenue Appeals Division determined that an out-of-state company’s participation in an annual three-day trade show in Washington state was sufficient to create substantial nexus with the state and subject the company to both business and occupation tax (B&O tax) and retail sales tax. The taxpayer, an out-of-state…

On November 16th and 17th, 2020, the Multistate Tax Commission’s (“MTC”) Nexus and Audit Committees met to consider several topics.  The biggest developments from these meetings are that: (1) the Nexus Committee shared their proposed, revised draft of its Uniform Sales and Use Tax Exemption/Resale Certificate – Multijurisdiction, which reflects the Wayfair …

A recent letter ruling from the Tennessee Department of Revenue concludes that the ownership of mortgages backed by Tennessee property was insufficient to subject a foreign investment fund (“Fund”) to the state’s franchise and excise taxes.

Tennessee broadly applies its franchise and excise tax to the extent permitted by the U.S. and state constitutions.  A…

On July 7, 2020, the California Office of Tax Appeals (OTA) held that a foreign LLC was subject to the state’s $800 LLC tax because it held a 0.7830849% ownership interest in an LLC that owned property in San Diego. In addition to a more traditional nexus test based on an entity’s business activities in…

The California Office of Tax Appeals (OTA) reversed the Franchise Tax Board’s (FTB) determination that an out-of-state limited liability company (LLC) had taxable nexus with California solely because it held an ownership interest in an LLC operating in the state that ranged from 1.12% to 4.75%. California imposes an annual $800 tax on LLCs “doing…