Read our May 2016 posts on stateandlocaltax.com or read each article by clicking on the title. For the latest coverage and commentary on state and local tax developments delivered directly to your phone, download the latest version of the Sutherland SALT Shaker app.
- Alabama Tax Tribunal Determines Out-of-State Bookseller Has Nexus, Joins “Club”
The Alabama Tax Tribunal concluded that an out-of-state retailer was required to collect and remit use tax on the sales of books and educational materials to in-state teachers and students, and that neither the Due Process Clause nor the Commerce Clause impeded the Alabama Department of Revenue’s authority to assess the seller for uncollected tax.
- SALT Pet of the Month: Scout
Meet Scout, this month’s Pet of the Month, submitted through our SALT Shaker App by the founder of the State Tax Foundation, Gary Peric.
- Separated, But Not Separately Stated: Indiana Tax Court Holds Utility Receipts
Tax Does Require Separate Statement of Nontaxable Receipts The Indiana Tax Court held that the plain language of Indiana’s utility receipts tax (URT) does not require taxpayers to separately state taxable and nontaxable receipts on their returns.
- Purposeful By-Product: Louisiana Supreme Court Determines Purchases of Limestone Used in Electricity Generation Qualified for ‘Further Processing Exclusion’ Under Louisiana Sales & Use Tax
The Louisiana Supreme Court concluded that limestone purchased for the dual purpose of absorbing sulfur during the generation of electricity and producing ash for sale to third parties was excluded from the definition of a “sale at retail” by application of the “further processing exclusion” under the Louisiana sales tax.
- It’s Plain (and Ordinary) to See: Michigan Court of Appeals Holds Unitary Business Group Does Not Exist
The Michigan Court of Appeals reversed a trial court ruling and held that three companies did not constitute a statutorily defined “unitary business group” for Michigan Business Tax (MBT) purposes.
- Damages Award Limited in Nevada Case Involving Tortious Conduct by California Franchise Tax Board
In a 4-4 decision, the U.S. Supreme Court affirmed the Nevada courts’ exercise of jurisdiction over the California Franchise Tax Board (FTB), but held, by a majority of the justices, that the taxpayer could only receive the damages Nevada provides for suits by private citizens against Nevada agencies.
- New Jersey Tax Court Rules on Inclusion of Mortgage-Related Receipts in Receipts Factor Numerator
The New Jersey Tax Court ruled on the sourcing of mortgage-related receipts received by a bank and also held that the Division of Taxation could not throw out receipts from the bank’s denominator.
- New York State Taxpayer Must Use Net Operating Loss When Paying on Alternative Tax Base
The New York State Tax Appeals Tribunal determined that a taxpayer subject to the Article 32 bank franchise tax must use its net operating loss deduction to reduce its entire net income to zero in years in which the bank franchise tax was paid by the taxpayer on an alternative, non-income tax base.
- New York Court Holds That Telecommunications Company Is Not a NYC Utility
The Supreme Court of the State of New York, New York County held that a telecommunications company was liable for both New York City’s Utility Tax and the City’s Unincorporated Business Tax (UBT) because the taxpayer was only lightly regulated by, rather than under the supervision of, the New York State Public Service Commission (PSC).
- Signals Crossed: Satellite TV Receipts Sourced to South Carolina Based on Subscriber Location
The South Carolina Administrative Law Court determined that a satellite television provider must source its subscription receipts to South Carolina based on the percentage of in-state subscribers.
- Bills, Bills, Bills: Texas Court of Appeals Scrubs Bill Pay Service Provider Free of Sales Taxes
In Hegar v. CheckFree Serv. Corp., a Texas Court of Appeals affirmed the trial court’s decision and held that the taxpayer’s online bill pay service was not a taxable data processing service for Texas sales tax purposes.
- Not on the Same Wavelength: Receipts from Radio Advertising Must Be Sourced to Texas When Broadcast from the State
The Texas Comptroller of Public Accounts concluded that a Texas-based national radio network must apportion its advertising receipts based on the ratio of radio stations that license and broadcast its programming from Texas compared to the total number of radio stations that license and broadcast such programming.
- Texas Comptroller Issues “Strong” Decision, Companies’ Single Shared Administrator Not Sufficient to Require Unitary Combined Filing
The Texas Comptroller upheld a taxpayer’s separate Franchise Tax return filing position, rejecting an Administrative Law Judge’s finding that the taxpayer and its affiliate shared a strong centralized management structure that required a unitary combined report.
- Rage Against the Machine: Virginia Court Declares Cable Set-Top Boxes Not Subject to County Property Tax
The Circuit Court of Henrico County, Virginia, recently affirmed a ruling by the Commissioner of the Virginia Department of Taxation (Commissioner) that determined a cable provider’s set-top boxes are not “machines” for local property tax purposes and therefore not subject to Henrico County property tax.
- The Home Stretch: Virginia Tax Commissioner Rules that Single Employee Working From Home Creates Nexus
The Virginia Tax Commissioner ruled that an out-of-state corporation had nexus with Virginia because an employee performed accounting, human resources, payroll and customer support functions from a home office in Virginia.