Tax Law

Recent Posts

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

New Jersey Tax Court Holds Appointment Allowed in Place of Business Suit
Posted on 11 Feb 2019 by Eversheds Sutherland LLP

The New Jersey Tax Court ruled that a corporation was entitled to apportion its corporate income based on a “regular place of business” outside of New Jersey. This now-repealed apportionment requirement was the source of several New Jersey Tax Court cases... Read More

New Mexico Administrative Hearings Office Rejects Department’s Attempt to Eliminate Payroll Factor from Apportionment Factor Calculation
Posted on 26 Jan 2019 by Eversheds Sutherland LLP

The State of New Mexico Administrative Hearings Office held that the New Mexico Taxation and Revenue Department could not remove the payroll factor from the apportionment factor calculation of a taxpayer in the credit card and personal lending business... Read More

New Jersey Tax Court Upholds Division’s Use of 25/50/25 Sourcing Rule
Posted on 25 Sep 2018 by Eversheds Sutherland LLP

The New Jersey Tax Court upheld the New Jersey Division of Taxation’s use of the 25/50/25 sourcing rule for “certain services” against a provider of mass messaging services by fax, email and voice. Specifically, the court upheld the Division’s determination... Read More

Minnesota Supreme Court Upholds Commissioner’s Use of Alternative Apportionment for Financial Institution
Posted on 26 Jul 2018 by Eversheds Sutherland LLP

The Minnesota Supreme Court held that the state’s standard apportionment method did not fairly reflect the taxpayer’s net income allocable to the state, reversing the Tax Court’s ruling. The taxpayer, a national financial institution, transferred its... Read More

Giving Credit Where It Isn’t Due: Arkansas Office of Hearings and Appeals Treats Sales of Tax Credits as Business Income
Posted on 22 Jun 2018 by Eversheds Sutherland LLP

On June 13, 2018, an Arkansas Administrative Law Judge concluded that a taxpayer’s proceeds from dispositions of tax credits were apportionable business income. In Arkansas, business income arises from either: (1) transactions and activity in the regular... Read More

Oregon Deems Amendments to Statutory State Apportionment Formulas to Be Constitutional
Posted on 4 May 2018 by Eversheds Sutherland LLP

In another of the so-called “Compact” cases, the Oregon Supreme Court affirmed the decision of the Oregon Tax Court and held that: (1) the 1967 Oregon Legislature, in enacting Oregon Statute Section 305.655, did not clearly and unmistakably intend for... Read More

Indiana Enacts IRC Conformity Bill, Decouples from Certain Federal Tax Reform Provisions
Posted on 17 May 2018 by Eversheds Sutherland LLP

On May 14, 2018, Indiana Governor Eric Holcomb signed into law H.B 1316 (the Bill). The Bill provides a number of changes to Indiana’s tax laws, including responding to provisions of the federal Tax Cuts and Jobs Act. Some notable provisions of the Bill... Read More

A Pinch of SALT: Implications of the MTC’s Market-Based Sourcing Model Regulations
Posted on 1 May 2018 by Eversheds Sutherland LLP

It is more complicated to determine an in-state sale regarding the provision of multistate services or licenses of intangibles. Historically, states looked to a taxpayer’s costs of performing the service or licensing the intangible. Some states have become... Read More

Maryland Enacts Legislation Adopting Single Sales Factor Apportionment
Posted on 25 Apr 2018 by Eversheds Sutherland LLP

On April 24, Maryland Governor Larry Hogan signed Senate Bill 1090 and House Bill 1794, which adds Maryland to the growing list of states that are moving towards a single sales factor formula to apportion corporate net income. Under prior Maryland law... Read More

Vexing Apportionment Challenges Stymie Flummoxed Tax Departments
Posted on 12 Aug 2014 by Peter Miller

The murky waters of state taxation, now characterized by single-sales-factor apportionment and economic nexus trends, continue to plague corner office decision-makers and the practitioners who counsel them. [See "Experts: Economic Nexus and Single... Read More

Florida DOR on Hedging: Mixed Bag or Safe Bet to Plan Future Transactions?
Posted on 26 Jul 2012 by Sean Craig

A Florida taxpayer was engaged in three types of hedging activity: (1) hedges on materials related to its inputs; (2) hedges related to the commodity it sells; and (3) hedges unrelated to items it purchases or sells. In deciding whether the hedging revenue... Read More

States Target Inter-Company Cash Management Structure
Posted on 7 Jan 2013 by Sean Craig

A common aspect of consolidated groups of companies is a centralized cash management function. While such a structure is a common item in corporate America, states are increasingly challenging any perceived tax benefits of such structures. Two states... Read More

States Target Inter-Company Cash Management Structure
Posted on 7 Jan 2013 by Sean Craig

A common aspect of consolidated groups of companies is a centralized cash management function. While such a structure is a common item in corporate America, states are increasingly challenging any perceived tax benefits of such structures. Two states... Read More

Florida DOR on Hedging: Mixed Bag or Safe Bet to Plan Future Transactions?
Posted on 26 Jul 2012 by Sean Craig

A Florida taxpayer was engaged in three types of hedging activity: (1) hedges on materials related to its inputs; (2) hedges related to the commodity it sells; and (3) hedges unrelated to items it purchases or sells. In deciding whether the hedging revenue... Read More