New York Administrative Court (Again) Holds Royalties Received from Foreign Related Parties Cannot be Excluded from Taxable Income

On December 19, 2019, the New York Division of Tax Appeals (DTA) held that a corporate taxpayer must include royalties received from foreign affiliates in the computation of its entire net income for its 2007 through 2012

By Nicole Boutros and Amy Nogid

The New Jersey Tax Court ruled that the Division of Taxation (“Division”) properly required a foreign (non-New Jersey domesticated) corporation to file corporation business tax (“CBT”) returns reporting licensing revenue from its parent attributable to New Jersey, based on New Jersey’s economic presence nexus standard, despite the parent’s royalty

By Derek Takehara and Pilar Mata

The Magistrate Division of the Oregon Tax Court held that for the tax year 2003, (1) Rent-A-Center, a rent-to-own operator, and its wholly-owned franchising subsidiary, ColorTyme, were not unitary; (2) ColorTyme did not have nexus with Oregon; and (3) Rent-A-Center and its captive insurance subsidiary, Legacy Insurance Co. (Legacy)

By Scott Booth and Andrew Appleby

Although states continue to challenge the validity of captive insurance companies, Wendy’s has notched several taxpayer victories. In a win involving Scioto Insurance Company (Scioto), Wendy’s captive insurance company, the Illinois Appellate Court held that Scioto constituted a bona fide insurance company that was properly excluded from Wendy’s combined

On March 28, 2013, the New York State Legislature passed budget legislation (S.2609D/A.3009D) that replaces the existing New York State and City related-party royalty add-back requirements with provisions based on the Multistate Tax Commission’s model add-back statute. In addition, the legislation repeals the New York State and City royalty income exclusions, which permitted taxpayers to

By Zachary Atkins and Jack Trachtenberg

The Commonwealth notched another win before the Massachusetts Appeals Court in a case of first impression affirming corporate excise tax assessments based on a disallowance of the taxpayers’ interest and royalty expenses for pre-addback (pre-2002) and addback tax years (post-2001). Under a clear and convincing evidence standard, the court