Shaking things up in state and local tax
Shaking things up in state and local tax
By Kathryn Pittman and Andrew Appleby
The Utah Department of Revenue concluded that gift codes sold by an out-of-state seller (Gift Code Issuer) to Utah consumers were not subject to sales and use tax and that specified activities conducted by third parties in Utah relating to such sales of gift codes did not create nexus…
The Multistate Tax Commission’s (MTC) Sales and Use Tax Uniformity Subcommittee is moving forward with a broad sales tax nexus model statute that includes click-through, affiliate and attributional nexus provisions. The Subcommittee also discussed a memorandum related to class actions and false claims acts. The nexus and class action projects are in the educational stage…
The Tennessee Department of Revenue released two taxpayer-favorable rulings related to the intangible expense addback statute and economic nexus on January 8, 2013. In Letter Ruling No. 12-32 (Dec. 19, 2012), the Department ruled that the discount incurred in the course of factoring trade receivables using an affiliated factoring company did not constitute an “intangible…
While most states that have “click-through nexus” sales tax laws have issued little to no guidance addressing the scope of their provisions, the Pennsylvania Department of Revenue (Department) issued guidance explaining the types of payment mechanisms that will trigger nexus.
The Department’s ruling supplements a December 1, 2011 Tax Bulletin (Tax Bull. 2011-01)…
Although we really think the Supreme Court should accept a nexus case, it has, once again, denied certiorari. Scholastic Book Clubs, Inc. v. Comm’r of Revenue Services, 38 A.3d 1183 (2012), cert. denied, 568 U.S. ___ (2012).
In a non-precedential, summary decision released May 3, 2012, the California State Board of Equalization (the Board) held that a foreign corporation with only one employee in California was “doing business” in the state and thus was subject to California’s corporation franchise tax. Appeal of Warwick McKinley, Inc., Cal. Bd. of Equal., Jan. 11, 2012 (released May 3, 2012). While California recently expanded its statutory definition of “doing business” in California Revenue and Taxation Code (CRTC) section 23101(b) to include a factor presence nexus test, the Board in Appeal of Warwick McKinley, Inc. focused on CRTC section 23101(a), which defines “doing business” to mean “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit.”Continue Reading California Nexus: Not in My House!
In our latest A Pinch of SALT column, Sutherland SALT’s Michele Borens and Scott Booth consider how the recent string of taxpayer-favorable nexus decisions will entice the U.S. Supreme Court to accept a nexus case.
Read “The Supreme Court Should Accept a Nexus Case – Part II,” reprinted with permission from the September…
The West Virginia Supreme Court of Appeals held that an out-of-state licensor of intangible property did not have nexus in West Virginia despite products bearing its intangible property being sold in the state. Griffith v. ConAgra Brands, Inc., Dkt. No. 10-AA-02 (W. Va. May 24, 2012). The decision is an important taxpayer victory, particularly for licensors of intangible property.
ConAgra Foods, Inc., a food products company, established and transferred to a wholly owned subsidiary, ConAgra Brands (CA Brands), numerous trademarks and trade names. CA Brands also acquired intangibles from unrelated third parties. CA Brands licensed the intangibles to related and unrelated parties in return for royalty payments. The licensed food products were manufactured by the licensees outside of West Virginia and were sold or distributed to wholesalers and retailers in several states, including West Virginia. CA Brands had no physical presence in West Virginia, and it did not control how the licensees distributed the products bearing the CA Brands’ intangibles.Continue Reading Efforts to Expand Economic Nexus Stall in West Virginia
In a taxpayer-friendly decision, a Washington State administrative law judge ruled that an out-of-state food products company did not have nexus with the state. The case, however, involved unique circumstances: a sales manager made two visits over a five-year period to an international wholesale buyer in Washington to promote sales of a product, and…
On March 22, 2012, Utah Governor Gary Herbert signed House Bill 384 (2012) into law, expanding the types of companies that are required to collect and remit Utah sales and use tax. HB 384 requires sellers that hold “substantial ownership interests” in certain “related sellers” to collect and remit Utah sales and use tax. Today, the Utah State Tax Commission released guidance on how to determine whether a business entity’s activities trigger the state’s new affiliate nexus law. The new nexus regulations go into effect on July 1, 2012.
The new affiliate nexus law, Utah Code Ann. § 59-12-107(2)(b), treats a seller as if it is selling tangible personal property, a service, or a product transferred electronically for use in Utah and will be required to collect and remit sales and use taxes if:Continue Reading Utah Quietly Expands Affiliate Nexus Statute
