Tax Law

Recent Posts

Business (Income) As Usual: Minnesota Supreme Court Rules Gain From Sale of LLC is Apportionable Business Income
Posted on 17 Sep 2020 by Eversheds Sutherland LLP

The Minnesota Supreme Court held that the gain from a corporation’s sale of its majority interest in a limited liability company (LLC) was apportionable business income subject to Minnesota corporate income tax. The Court explained that the corporation... Read More

Trouble at the Pump: Indiana Department of Revenue Concludes that a Holding Company is not Unitary with a Gas Station Partnership
Posted on 8 Sep 2020 by Eversheds Sutherland LLP

In Indiana Department of Revenue Letter of Findings No. 02-20191221 (Dated June 3, 2020, published August 26, 2020), the Department concluded there was a lack of a unitary business relationship between an out-of-state holding company and a partnership... Read More

Lost in customs: New York Tax Appeals Tribunal disallows deduction for royalties paid by foreign nontaxpayer affiliates
Posted on 31 Aug 2020 by Eversheds Sutherland LLP

On Aug. 6, the New York Tax Appeals Tribunal held that royalties received from a foreign affiliate are taxable and are not subject to New York’s royalty income exclusion provision under former Tax Law § 208(9)(o)(3). Prior to its amendment, Tax Law... Read More

Maine Takes a Jumbo Slice of Taxpayer’s $3.6 billion Frozen Pizza Business Sale
Posted on 23 Jun 2020 by Eversheds Sutherland LLP

The Maine Supreme Judicial Court recently held that a taxpayer was not entitled to alternative apportionment for approximately $3 billion in gains earned from the sale of a business unit. The taxpayer was a food and beverage manufacturer that sold its... Read More

Prohibited contacts: Washington Company’s Audit Disqualifies its Affiliates from Voluntary Disclosure Program
Posted on 10 Jun 2020 by Eversheds Sutherland LLP

The Washington Department of Revenue’s Administrative Revenue and Hearings Division ruled that a company’s audit disqualifies its affiliates from participating in the state’s voluntary disclosure (VDA) program. One of the criteria for participating in... Read More

Cleared for Takeoff: Texas Supreme Court finds Jet Sales Properly Sourced out of State
Posted on 14 May 2020 by Eversheds Sutherland LLP

The Texas Supreme Court held that a defense contractor was entitled to a refund of franchise tax because it had incorrectly sourced certain sales of military aircraft made to foreign governments to Texas on its originally-filed returns for the 2005 through... Read More

Michigan Court of Appeals Finds an Almost Five-Fold Sales Factor Increase to be Unconstitutionally Distortive
Posted on 19 Mar 2020 by Eversheds Sutherland LLP

The Michigan Court of Appeals recently held that the state’s statutory apportionment formula was unconstitutionally distortive as applied to a taxpayer’s Michigan Business Tax (MBT) liability. Therefore, the taxpayer was entitled to use an... Read More

New Jersey Tax Court Concluded SMLLC’s Share of Partnership Loss Not Business Loss
Posted on 17 Mar 2020 by Eversheds Sutherland LLP

The New Jersey Tax Court ruled that an individual owner of a single-member limited liability company (“SMLLC”) correctly reported his distributive share of partnership income reported by the SMLCC. The SMLLC owned a 50% interest in a partnership that... Read More

Failed Test – State of Washington Holds University of Utah Lab Not Exempt from Taxation
Posted on 13 Mar 2020 by Eversheds Sutherland LLP

The Washington Court of Appeals held that a laboratory created by the University of Utah was not a government entity exempt from Washington taxation. Affirming the lower court’s decision, the Washington Court of Appeals rejected Arup Laboratories, Inc... Read More

Ohio NBA Owner Wants Only the Net Taxed
Posted on 29 Jan 2020 by Eversheds Sutherland LLP

The owner of an NBA arena is appealing an Ohio commercial activity tax (CAT) determination arguing that gross receipts from ticket sales of third-party events hosted at the arena are not attributable to the owner. When the arena was not being used by... Read More

Going to the Dogs: Pet Food Seller’s Intelligence Gathering in Maryland Exceeds P.L. 86-272 Protection
Posted on 3 Jan 2020 by Eversheds Sutherland LLP

The Maryland Court of Special Appeals upheld the Comptroller’s determination that an out-of-state pet food seller did not qualify for Public Law 86-272 protection because the seller’s collection of competitive information in Maryland by its employees... Read More

New Mexico Administrative Hearings Office Approves UPS’s Alternative Apportionment Method
Posted on 20 Dec 2019 by Eversheds Sutherland LLP

The New Mexico Administrative Hearings Office determined that UPS may depart from the statutory apportionment method for trucking companies, based on mileage driven in the state, because it produces a result that bears no rational relationship to UPS... Read More

Utah Supreme Court Upholds the Constitutionality of Not Providing a Foreign Tax Credit
Posted on 18 Oct 2019 by Eversheds Sutherland LLP

The Utah Supreme Court upheld the constitutionality of Utah’s taxing scheme, which provides a credit against taxes paid to other states, but not against taxes paid to foreign governments. The taxpayers – Utah residents who owned interests in a Subchapter... Read More

Maryland Comptroller’s Limitations on NOLs Ruled Invalid
Posted on 11 Oct 2019 by Eversheds Sutherland LLP

The Maryland Tax Court reversed the Comptroller’s disallowance of NOLs and essentially struck down a regulation that limited the usage of pre-nexus NOLs. The Comptroller disallowed the taxpayer’s use of NOLs accumulates by entities with no nexus in Maryland... Read More

Out of Time: Massachusetts Dismisses Taxpayer’s Attempt to Seek Refund as Untimely
Posted on 9 Oct 2019 by Eversheds Sutherland LLP

Massachusetts Court of Appeals held that a taxpayer could not rely on timely applications for refund of deficiency assessments to also seek refund resulting from alleged overstatement of sales factor in corresponding years’ returns, where the initial... Read More