Read our November 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.

• Illinois Appellate Court Finds Retailer Not Liable Under State’s False Claims Act
  The Illinois Appellate Court held that a defendant out-of-state retailer was not liable under the state’s False Claims Act because it conducted a good faith inquiry into its use tax collection obligations for both its Internet and catalog sales.
• SALT Pets of the Month: Lemon and Lime
  Meet Lemon and Lime, the one-year-old parakeets belonging to Sutherland SALT Legal Secretary, Barbara Keihani-Dubison.
• Keep on Streamin’: Kentucky Court Holds Taxes Inapplicable to Streaming Video Service
  The Franklin County Circuit Court held that Netflix’s subscription-based streaming video service was not subject to Kentucky’s gross revenues tax, excise tax and school tax (telecommunications taxes) imposed on “multichannel video programming service” (MVPS).
• New Jersey Tax Court Rejects Application of 100% Apportionment Factor But Denies In-State Company’s Bid to Use Three-Factor Formula
  The New Jersey Tax Court held that apportioning all of a company’s income to New Jersey for corporate business tax purposes, even with the allowance of a credit for taxes paid to separate-return states, failed to fairly reflect the company’s business activities in New Jersey.
• New Jersey Tax Court Analyzes Credit Card Receipt Sourcing
  The New Jersey Tax Court determined that credit card issuers must source to New Jersey all of their interest and interchange fee receipts, and half of their credit card service fees, from New Jersey accountholders.
• New Mexico Hearing Officer Rules Equitable Recoupment Does Not Offset Gross Receipts Tax on Seller of Software Licenses
  A New Mexico Taxation and Revenue Department administrative hearing officer found that a seller could not use equitable recoupment as a defense to offset gross receipts (sales) tax assessed on its sales of software licenses.
• NYC Tax Appeals Tribunal Allocates Consulting Service Provider’s Receipts Based on Location of Consultants
  The New York City Tax Appeals Tribunal administrative law judge (ALJ) determined that a taxpayer’s receipts for consulting services should be allocated based on where the services were rendered, not where the solicitation and payment for the services occurred.
• Two Bites, Zero Success: South Carolina Court of Appeals Determines Department Did Not Satisfy Its Burden to Justify Alternative Apportionment
  On October 26, 2016, the South Carolina Court of Appeals reversed a lower court ruling and determined the Department of Revenue (Department) failed to satisfy its burden of showing that the statutory apportionment formula did not fairly represent Rent-A-Center West Inc.’s (RAC) business activities in South Carolina.