LexisNexis® Legal Newsroom
New York State Tax Appeals Tribunal: Payments to Captive Insurance Company Did Not Qualify as Deductible Insurance Premiums

By Andrew Appleby and Dmitrii Gabrielov The New York State Tax Appeals Tribunal released its precedential decision in Stewart’s Shops , affirming an Administrative Law Judge’s determination that payments by a corporation to its captive insurance company did not qualify as deductible insurance...

Roam Where You Want To: City of Seattle Lacks Authority to Tax Foreign Roaming Charges

By Maria Todorova and Suzanne Palms The Washington Court of Appeals recently held that Seattle could not impose a utility tax on revenue derived from international roaming charges (charges for mobile telephone communications that originate in a foreign country). City of Seattle v. T-Mobile West Corp...

Videocast: SALT Scoreboard - 2017 Mid-Year Review

The quarterly Eversheds Sutherland SALT Scoreboard tallies significant state and local tax litigation wins and losses. In this videocast, Charles C. Capouet and Hanish S. Patel share the second quarter highlights from the SALT Scoreboard , including a breakdown of corporate income tax and sales and use...

Minnesota Supreme Court Respects Federal Check-the-Box Election for Minnesota Combined Reporting Purposes

By Samantha Trencs and Jeff Friedman The Minnesota Supreme Court respected a foreign entity’s federal check-the-box election for the purpose of determining which entities were included in the Minnesota combined franchise tax reports. The court held that including the income and apportionment...

Minnesota Tax Court: Net Operating Loss Limitation is Applied Solely on a Pre-Apportioned Basis

By Debra Salvato and Scott Wright The Minnesota Tax Court recently held that the annual limitation on net operating losses of an acquired corporation is to be applied only once to a taxpayer’s pre-apportioned income. The taxpayer, Sinclair Broadcast Group, Inc., acquired a company with significant...

Virginia Supreme Court Limits Corporate Income Tax Addback Exception

On August 31, 2017, the Virginia Supreme Court issued its opinion in Kohl’s Department Stores, Inc. v. Virginia Department of Taxation , holding that only the portion of royalties that are actually taxed by another state falls within its “subject to tax” exception to Virginia’s...

South Carolina Court of Appeals Sends Taxpayers Clear Signal; Rules DIRECTV Must Source Receipts Based on Satellite Signal Delivery

By Dmitrii Gabrielov and Tim Gustafson The South Carolina Court of Appeals held that all of DIRECTV’s South Carolina customer subscription receipts were properly sourced to the state for purposes of determining DIRECTV’s corporate income tax apportionment factor due to the location of its...

North Carolina Supreme Court Determines that Bank's Market Discount Income Is Not Deductible as Interest

By Liz Cha and Open Weaver Banks The North Carolina Supreme Court affirmed the North Carolina Business Court’s decision that Fidelity Bank was precluded from deducting “market discount income” from US bonds for North Carolina corporate income tax purposes. Fidelity Bank acquired US...

Massachusetts Supreme Judicial Court Holds Taxation of Drop Shipments Is Constitutional

By Charles Capouet and Jonathan Feldman The Massachusetts Supreme Judicial Court held that an in-state wholesaler was required to collect and remit sales tax on drop shipment sales made to Massachusetts customers. A drop shipment is a transaction in which an in-state customer purchases a product from...

Delaware Sewer and Water Authority Successfully Challenges Permit "Fee" as Disguised Tax

By Mike Kerman and Jonathan Feldman The Delaware Chancery Court held that a town’s $27,000 building permit “fee” was in substance a tax that could not be levied against a tax-exempt water and sewer authority. The town assessed the fee upon the water and sewer authority before it would...

New York State Tax Appeals Tribunal: Assessment of Non-Admitted Alien Insurance Companies Violated Tax Treaty and Foreign Commerce Clause

By Huy "Mike" Le and Andrew Appleby The New York State Tax Appeals Tribunal (Tribunal) held that the Department’s assessment of two non-admitted German insurance companies violated the United States-Germany Tax Treaty’s anti-discrimination clause and the US Constitution’s...

Sixth Circuit Rejects a Narrow Reading of TIA to Deny Religious Nonprofit Federal Remedy

By Alla Raykin and Charlie Kearns The US Court of Appeals for the Sixth Circuit held that the Tax Injunction Act (TIA) barred a religious nonprofit from bringing a federal suit over Tennessee’s denial of a retroactive property tax exemption. In Islamic Ctr. of Nashville v. Tennessee , the Islamic...

Eversheds Sutherland SALT Scoreboard Publication - Third Quarter 2017

Eversheds Sutherland SALT releases the seventh edition of its SALT Scoreboard, a quarterly publication that tracks significant state tax litigation and controversy developments. This edition of the SALT Scoreboard highlights developments regarding the sales taxation of drop shipments and the inclusion...

Pennsylvania Supreme Court Finds Flat-Dollar NOL Cap Unconstitutional, But Upholds Percentage Cap

On October 18, 2017, the Pennsylvania Supreme Court issued its decision in Nextel Communications of the Mid-Atlantic, Inc. v. Pennsylvania Department of Revenue , in which the court held that the state’s flat $3 million cap on net operating loss carryforwards violates the state constitution’s...

New York State Appellate Division Affirms that HMOs Were Subject to New York City General Corporation Tax

By Dmitrii Gabrielov and Andrew Appleby The New York State Supreme Court, Appellate Division, affirmed the New York City Tax Appeals Tribunal’s (Tribunal) decision that Aetna’s subsidiary health maintenance organizations (HMOs) were subject to the New York City General Corporation Tax ...

Colorado Court of Appeals Held that Out-of-State Holding Company is Not Included in Combined Report

By Samantha Trencs and Eric Coffill The Colorado Court of Appeals held that a corporate parent doing business in Colorado was not required to include its subsidiary holding company that held no property or payroll in Colorado or elsewhere in its Colorado unitary combined corporate income tax report...

New York State Advisory Opinion: Non-US Unauthorized Life Insurance Companies' Premiums Excluded from Apportionment Factor

By Dmitrii Gabrielov and Andrew Appleby The New York State Department of Taxation and Finance issued an advisory opinion determining that non-US unauthorized life insurance companies’ premiums were not includable in the New York State insurance franchise tax apportionment factor. The Department...

California Declines to Extend Landing-Based Situs Property Tax Rule to All Aircraft

By Liz Cha and Carley Roberts The California Court of Appeal held that the entire value of an air taxi company’s jets were subject to the County of Los Angeles 1% personal property tax, despite the fact that the jets spent 40% of their time outside of California. The court reasoned that the brief...

Tennessee DOR Subjects Cloud-Based Employee Scheduling Services to Sales and Use Tax

By Liz Cha and Todd Lard The Tennessee Department of Revenue issued a letter ruling finding that a taxpayer’s annual subscription charge for its cloud-based employee scheduling services is subject to Tennessee sales and use tax. In Tennessee, the use of computer software is subject to tax,...

When Holding On Is Letting Go: Alabama Supreme Court Agrees Holding Title to Goods Delivered into City Insufficient for Purposes of Imposing Municipal Business License Tax

By Mike Le and Tim Gustafson On December 8, 2017, the Alabama Supreme Court issued an order without opinion in Thomas v. Elbow River Marketing Ltd. Partnership , affirming a lower court’s decision that a Canada-based seller of hydrocarbon products did not engage in or carry on a business in the...

Surrender: Minnesota Department of Revenue Gives Away NOL Limitation Case

By Charles Capouet and Charlie Kearns On November 6, 2017, the Minnesota Department of Revenue issued a Revenue Notice advising taxpayers that it acquiesces to the Minnesota Tax Court’s decision in Sinclair Broadcast Group, Inc. v. Commissioner of Revenue . As a result, the Department now takes...

Superior Court of Washington Strikes Down New Income Tax on High Income Residents

By Liz Cha and Eric Coffill The Superior Court of Washington for King County held that Seattle’s new income tax on “high income residents” violates a provision of Washington state law which prohibits a city from levying a tax on net income. On July 14, 2017, Seattle Mayor Ed Murray...

New Jersey Cannot Require an "Addback" of Income Not Included in Federal Taxable Income Because of Treaty Benefit

By Sam Trencs and Open Weaver Banks The New Jersey Tax Court held that New Jersey could not impose corporation business tax on a foreign corporation’s foreign source income that was not included in the federal tax base because of a treaty benefit. Although New Jersey is permitted to adopt a legislative...

Tread Lightly: New Mexico Finds Gain from Stock Sale Is Business Income

By Chelsea Marmor and Charlie Kearns The New Mexico Administrative Hearings Office affirmed the Taxation and Revenue Department’s assessment to Agman Louisiana Inc. based on the taxpayer’s gain from the sale of stock of a corporation in which the taxpayer owned less than a 50% interest...

Eversheds Sutherland SALT Scoreboard Publication--Fourth Quarter 2017

Eversheds Sutherland SALT releases the eighth edition of its SALT Scoreboard, a quarterly publication that tracks significant state tax litigation and controversy developments. This edition of the SALT Scoreboard includes our year-end observations for 2017, a discussion of the Pennsylvania Supreme Court’s...