Tax Law

Recent Posts

Apples to Oranges: Arkansas finds no independent business versus non-business test for expenses
Posted on 10 May 2019 by Eversheds Sutherland LLP

On April 1, 2019, the Arkansas Office of Hearings and Appeals held that a taxpayer could not deduct interest expense for long-term debt used to finance a cash dividend as a non-business expense allocable to Arkansas because there was no corresponding... Read More

More Than Smoke: Oregon Tax Court Holds Cigarette Manufacturer’s In-State Activities Exceeded P.L. 86-272
Posted on 28 Mar 2019 by Eversheds Sutherland LLP

On February 26, 2019, the Oregon Tax Court held that an out-of-state cigarette manufacturer’s in-state activities violated Public Law 86-272, resulting in the manufacturer being subject to Oregon’s corporation excise tax. P.L. 86-272 prohibits any state... Read More

Kentucky Court of Appeals Holds Parent Company Not Includible in Consolidated Return
Posted on 29 Mar 2019 by Eversheds Sutherland LLP

The Kentucky Court of Appeals held in an unpublished opinion that an out-of-state parent company was not an “includible corporation” as defined by Kentucky law and could not file a consolidated return with its in-state subsidiary. The Department argued... Read More

Tennessee rules the “true object” of a bundled transaction is nontaxable data analytics services, not remotely accessed software
Posted on 1 Apr 2019 by Eversheds Sutherland LLP

The Tennessee Department of Revenue issued a letter ruling finding that a taxpayer’s mobile and web data analytics services were not subject to sales and use tax. The taxpayer’s customers installed the taxpayer’s software code, which collected user data... Read More

Maryland Tax Court Strikes Again: Out-of-State LLCs Liable for Maryland Income Tax
Posted on 1 Apr 2019 by Eversheds Sutherland LLP

The Maryland Tax Court held that six nonresident Limited Liability Companies (LLCs) wholly-owned by another out-of-state limited liability company owed Maryland income tax despite the fact that the LLCs, as disregarded entities, had no federal income... Read More

Tennessee rules the “true object” of a bundled transaction is nontaxable data analytics services, not remotely accessed software
Posted on 1 Apr 2019 by Eversheds Sutherland LLP

The Tennessee Department of Revenue issued a letter ruling finding that a taxpayer’s mobile and web data analytics services were not subject to sales and use tax. The taxpayer’s customers installed the taxpayer’s software code, which collected user data... Read More

Maryland Tax Court Strikes Again: Out-of-State LLCs Liable for Maryland Income Tax
Posted on 1 Apr 2019 by Eversheds Sutherland LLP

The Maryland Tax Court held that six nonresident Limited Liability Companies (LLCs) wholly-owned by another out-of-state limited liability company owed Maryland income tax despite the fact that the LLCs, as disregarded entities, had no federal income... Read More

Kentucky Court of Appeals Holds Parent Company Not Includible in Consolidated Return
Posted on 29 Mar 2019 by Eversheds Sutherland LLP

The Kentucky Court of Appeals held in an unpublished opinion that an out-of-state parent company was not an “includible corporation” as defined by Kentucky law and could not file a consolidated return with its in-state subsidiary. The Department argued... Read More

More Than Smoke: Oregon Tax Court Hold Cigarette Manufacturer’s In-State Activities Exceeded P.L. 86-272
Posted on 28 Mar 2019 by Eversheds Sutherland LLP

On February 26, 2019, the Oregon Tax Court held that an out-of-state cigarette manufacturer’s in-state activities violated Public Law 86-272, resulting in the manufacturer being subject to Oregon’s corporation excise tax. P.L. 86-272 prohibits any state... Read More

New Jersey Tax Court Rules Not Taxes but Must be Added-Back as Taxes for CBT
Posted on 27 Mar 2019 by Eversheds Sutherland LLP

On January 31, 2019, the New Jersey Tax Court issued its ruling on whether a taxpayer must add-back intercompany payments to its parent, estimated payments based on tax sharing agreements, as tax payments made to other states. The payments were to reimburse... Read More

Indiana Department of Revenue Finds Out-of-State Pharmacy Benefit Management Provider Must Include Income from Drug Sales to Indiana Customers in Sales Factor
Posted on 25 Mar 2019 by Eversheds Sutherland LLP

In a letter of finding, the Indiana Department of Revenue concluded that a pharmacy benefit management provider was required to include in its sales factor receipts from prescription drugs sold to Indiana customers. The taxpayer contracted with insurance... Read More

Too Bad, So Sad – Virginia Supreme Court Upholds COP Apportionment Despite Subjecting the Taxpayer to Double Taxation
Posted on 22 Mar 2019 by Eversheds Sutherland LLP

The Virginia Supreme Court held that the use of the cost-of-performance method to apportion nearly 100% of the taxpayer’s sales of services to Virginia did not violate the U.S. Constitution, even though over 95% of the taxpayer’s customers were located... Read More

Unboxing the New Jersey Tax Court’s Decision in IP Holding Company Nexus Case
Posted on 19 Mar 2019 by Eversheds Sutherland LLP

The New Jersey Tax Court denied a holding company’s motion for partial summary judgment seeking a determination that the taxpayer lacked nexus with New Jersey and would not be required to file corporation business tax returns. The taxpayer’s only connection... Read More

New York City Tax Tribunal finds that ownership of a flow-through interest can create nexus.
Posted on 13 Mar 2019 by Eversheds Sutherland LLP

The New York City Tax Tribunal held that an out-of-state corporate taxpayer, with an indirect interest in a limited liability company investment fund engaged in business in New York City, had nexus with the City and was subject to tax on capital gain... Read More

New Jersey Upholds Assessment Addressed to Wrong Taxpayer and Routed to Wrong Location
Posted on 9 Feb 2019 by Eversheds Sutherland LLP

The New Jersey Tax Court rejected a taxpayer’s due process claim finding that the Division of Taxation properly issued the notice of assessment. The taxpayer made three arguments: (1) that the Division issued the assessment in the name of the predecessor... Read More