California has enacted one of its most significant sales tax changes in decades, expanding the state’s sales tax base to include electronically delivered and remotely accessed software. In this episode of the SALT Shaker Podcast, hosts and Partners Jeremy Gove and Chelsea Marmor are joined by Partners Michele Borens and Charlie Kearns, both of whom
In Tyson Chicken, Inc. v. Hudson, the Arkansas Supreme Court addressed whether rented wooden shipping pallets used to deliver chicken products qualify for the state’s sale for resale exemption. The court concluded they do not, affirming the circuit court’s grant of summary judgment in favor of the Department of Finance and Administration.
Three Tyson
On remand from the Ohio Supreme Court, the Ohio Board of Tax Appeals (BTA) applied the true object test to determine whether charges paid by Cincinnati Federal Savings & Loan (Cincinnati Federal) to Fiserv constituted taxable automatic data processing (ADP) and electric information services (EIS), or nontaxable professional services. The Ohio Supreme Court had previously
The Indiana Tax Court addressed whether cell phones qualify for Indiana’s telecommunications equipment exemption from sales and use tax. New Cingular purchased certain cell phones that were later used to fulfill contractual obligations by either providing them free to customers who entered service agreements, or by issuing replacements under insurance programs. New Cingular sought a
The North Carolina Superior Court held that intercompany transfers of product between affiliated entities do not constitute “sales” subject to sales tax when those transfers are not supported by bargained-for consideration, even if the taxpayer records the transfers using hypothetical “due to/due from” accounting entries.
The taxpayer, Asphalt Emulsion Industries, LLC (AEI), was a single-member
The Washington Court of Appeals held that a company’s title insurance and escrow services provided remotely should be sourced to Washington because the company’s customers made “first use” of the services in Washington. The trial court held that the services were sourced out-of-state to the remote location where the title company performed its services under
The Michigan Court of Appeals held that the Michigan Department of Treasury was permitted to engage in an indirect audit of a taxpayer because of its insufficient recordkeeping. The taxpayer operated oil change and automotive maintenance facilities in Michigan. It claimed sales tax exemptions for labor charges associated with its services. On audit, the Department
The New York Supreme Court, Appellate Division, affirmed a decision of the Tax Appeals Tribunal, which determined that a company’s charges for a proprietary technological platform, referred to as a “vendor management system” (VMS), constituted licenses to use prewritten computer software that were subject to sales tax. The company matched clients with suppliers of contingent
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)
The taxpayer, a fleet management company that leases fleets of commercial vehicles to businesses, used leases containing a terminal rental adjustment clause (TRAC). Under these leases, the lessee paid estimated monthly rent based on the projected residual book value of the vehicle at lease termination. When the lease ended, the estimated rent was retrospectively adjusted
