Shaking things up in state and local tax
Shaking things up in state and local tax
By Ted Friedman and Carley Roberts
The West Virginia Office of Tax Appeals (OTA) ruled that an out-of-state corporation, with no physical location or employees in West Virginia, owed sales and use tax on sales of garage equipment in the state. The OTA determined that the corporation had nexus with West Virginia based on its…
By Hanish Patel and Open Weaver Banks
A New York Division of Tax Appeals Administrative Law Judge (ALJ) held that an electricity producer’s purchases, installations and repairs of “step-up transformers” were not subject to sales and use tax because the transformers were “used directly” in the production of electricity. Step-up transformers are used to “step…
On February 11, the United States Senate approved a permanent extension of the Internet Tax Freedom Act (ITFA), which previously passed the House of Representatives on December 15, 2015. Additionally, ITFA’s Grandfather Clause, which allows certain states to continue to tax Internet access, is phased out. President Obama is expected to sign the permanent extension …
By Chris Mehrmann and Scott Wright
The Alabama Tax Tribunal invalidated a regulation requiring a direct pay permit holder, Tyson Chicken, Inc. (Tyson), to purchase all items tax-free, finding that the regulation was both unreasonable and unduly burdensome. Although Tyson purchased most items tax-free using its direct pay permit, Tyson employees used corporate credit or…
By Chris Mehrmann and Charlie Kearns
The Tennessee Department of Revenue has issued guidance explaining that the retail sale of, use of, or subscription to a computer software maintenance contract is subject to sales and use tax when: (1) the maintenance contract is sold as part of a taxable sale of computer software; (2) the…
By Jonathan Feldman and Hanish Patel
The Georgia Department of Revenue issued a proposed regulation amending the use of direct pay permits for state and local sales and use taxes. The proposed regulation would cause all current permits to expire on December 31, 2016, and require all current holders to reapply and agree to certain…
In a significant rebuff of the California State Board of Equalization (BOE), the California Second District Court of Appeal held that a manufacturer’s sale of software on tangible media was exempt from sales tax under the technology transfer agreement (TTA) statutes. Lucent Technologies, Inc. v. State Bd. of Equalization, No. B257808, 2015 WL 5862533.
In Part I of their series for State Tax Notes, Sutherland attorneys Leah Robinson and Evan M. Hamme provided a roadmap describing how to challenge a department of revenue’s assertion that online services are taxable as licenses of software. While focused on New York audits, the roadmap can assist in any similar audit.
In Part…
By Olga Goldberg and Amy Nogid
The Wyoming State Board of Equalization held that telecommunications equipment shipped to and temporarily stored in Wyoming by a purchaser before being transported by the purchaser for installation in Montana by the manufacturer was not subject to the state’s use tax. Range Telephone Cooperative, Inc. (Range), a Wyoming-based telephone…
By Mike Kerman and Charlie Kearns
The Indiana Department of Revenue (Department) found that a medical research company that purchased software licenses was entitled to an exemption from use tax for purchases of taxable computer software as long as it could show the licenses were ultimately used outside of Indiana. The Department added that an…
