The pending precedential Office of Tax Appeal’s (OTA) decision of Appeal of L. Smith, OTA Case No. 20036033 (Dec. 7, 2022) concerned whether California could impose income tax on a nonresident’s distributive share of gain from the sale of an interest in a timeshare developer operating in California as a limited liability company (Timeshare).

The Indiana Department of Revenue found that a holding company was properly excluded as a member of its affiliates’ financial institutions tax (FIT) combined group return because the company failed to establish nexus with the state.  The Department also decided that for purposes of the FIT, there is no distinction between business and nonbusiness income.