LexisNexis® Legal Newsroom
Tennessee Federal Court Holds That State Sales Tax on Railroad Carriers Does Not Violate the 4-R Act

By Liz Cha and Eric Coffill The United States District Court for the Middle District of Tennessee held that Tennessee’s sales tax on railroad carriers for the purchase or use of diesel fuel was not discriminatory under the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act) even...

It's the End Product that Counts: Texas Comptroller Finds Payment Risk and Fraud Prevention Solutions Should Be Apportioned as a Service

By Nick Kump and Todd Lard The Texas Comptroller of Public Accounts has issued a private letter ruling finding that a Texas company’s revenue from sales of real-time payment risk and fraud prevention services should be sourced to the location of Taxpayer’s customers. In Texas, receipts...

New York Sales Tax Price of Being a Member of the Club

By Alla Raykin and Jonathan Feldman In an Advisory Opinion, the New York Department of Taxation and Finance concluded that fees paid to a social club by non-members for certain activities (tennis lessons, children’s camp, basketball court use, etc.) are not subject to tax, although membership...

US Supreme Court Declines to Review Retroactive State Tax Legislation

By Jeff Friedman and Stephanie Do Following an unfavorable court decision, state legislatures have been able to effectively reverse a decision by retroactively changing the law. Several taxpayers have challenged the validity of retroactive state tax changes by arguing that the retroactive laws violate...

California Legislature Passes Bill That Creates Two New Tax Agencies and Reduces the Board of Equalization's Powers

On June 15, the California Legislature passed Assembly Bill 102, the Taxpayer Transparency and Fairness Act of 2017, which divests the California State Board of Equalization (BOE) of several key functions and creates two new government agencies—the California Department of Tax and Fee Administration...

A Pinch of SALT: Trends and Developments in Alternative Apportionment of State Income

While alternative apportionment is an important relief mechanism to avoid unjust taxation, it is often used to justify the ad hoc administration of tax. View the latest edition of A Pinch of SALT , by Eversheds Sutherland (US) attorneys Christopher Lutz , Robert Merten and Nicholas Kump , which reports...

Kroger False Claims Act Lawsuit Remanded to Indiana State Court for Lack of Diversity Jurisdiction

By Dmitrii Gabrielov and Jonathan Feldman An Indiana federal court remanded a lawsuit brought under the Indiana False Claims and Whistleblower Protection Act (False Claims Act) back to Indiana state court. The relator, Michael Harmeyer, alleges that Kroger and affiliates violated the False Claims Act...

Maryland Tax Court Reiterates That Nonadmitted Insurance Companies Are Exempt from Maryland Corporate Income Tax

By Robert Merten and Andrew Appleby The Maryland Tax Court granted a summary judgment motion exempting a Vermont-licensed insurance company from almost $24 million in corporate income tax, interest, and penalties. The short two-page order swiftly cites to and expressly follows the court’s previous...

Pennsylvania Appeals Court Upholds Philadelphia Beverage Tax

By Jessica Eisenmenger and Open Weaver Banks The Commonwealth Court of Pennsylvania upheld the Philadelphia Beverage Tax (PBT) against a challenge by the American Beverage Association and other challengers. The PBT imposes a 1.5¢ per fluid ounce tax on sugar-sweetened beverages and is generally...

Georgia Senate Special Tax Exemption Study Committee Holds First Meeting

The Georgia Senate Special Tax Exemption Study Committee held its initial meeting to plan evaluation of Georgia income and sales tax exemptions by December 1, 2017. The special study committee was created by a Georgia Senate Resolution during the 2017 Legislative Session. The Committee will prioritize...

Maine Enacts Economic Nexus Provisions for Sales Tax Purposes

By Chris Beaudro and Carley Roberts On June 21, 2017, the Maine Legislature overrode the Governor’s veto and passed legislation requiring the collection of sales tax by remote sellers. The legislation requires remote sellers to collect Maine sales tax on their sales into the state if the seller’s...

Hold the Phone! Answering Your Phone in Washington Might Cost You

By Chelsea Marmor and Open Weaver Banks The Administrative Review and Hearings Division at the Washington Department of Revenue (the Division) determined that administrative activities qualify as business activities for purposes of applying Washington’s throw-out rule under the Washington business...

Congress Holds Hearing on Legislation to Limit State Taxation

On July 25, 2017, the US House of Representatives Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law conducted a hearing on "No Regulation Without Representation: HR 2887 and the Growing Problem of States Regulating Beyond Their Borders.” This hearing...

Marketplace Providers Are Statutorily Required to Collect Sales Tax in Minnesota and Washington

By Jeff Friedman and Stephanie Do A new landmark sales tax statute has been adopted in Minnesota, which expands sales tax collection requirements to those retailers that sell their goods on certain “marketplaces.” Generally, only a retailer that is physically present in a state is required...

Texas Supreme Court Upholds Local Ad Valorem Tax on Stored Gas

By Jessie Eisenmenger and Jonathan Feldman The Texas Supreme Court held that a non-discriminatory tax on stored gas held for future resale does not violate the Commerce Clause of the US Constitution. Harris County imposed an ad valorem tax on natural gas stored in the county on January 1 of the tax...

Bundled Up: Rhode Island Division of Taxation Finds Subscription Fee Subject to Sales and Use Tax

By Maria Todorova and Charles Capouet The Rhode Island Division of Taxation ruled that a monthly or annual membership fee that allowed customers to access various benefits associated with shopping on a taxpayer’s website—including discounted shipping benefits; streaming or downloading movies...

Sugar-Sweetened Beverage Taxes Burden Taxpayers

To raise revenue and tackle health concerns, a number of localities have imposed sugar-sweetened beverage (SSB) taxes. However, localities may have limited guidance on how these taxes are administered. Read this Bloomberg BNA article, which discusses: Sugar-sweetened beverage tax background Why...

Colorado DOR Addresses How Affiliated Group with Different Commercial Activities Must Allocate and Apportion Income

By Samantha Trencs and Carley Roberts In a private letter ruling, the Colorado Department of Revenue stated that an affiliated group of corporations engaged in distinctly different commercial activities requiring different apportionment methodologies under Colorado law could use the allocation and...

New California Tax Agencies' Roles Clarified

On September 16, 2017, California Governor Jerry Brown signed Assembly Bill 131, a budget trailer bill clarifying a number of provisions related to the roles of California’s two new tax agencies, the California Department of Tax and Fee Administration (CDTFA) and the Office of Tax Appeals (OTA...

Indiana DOR: "Equity" Prevents Application of Throwback Rule

By Ted Friedman and Eric Coffill On August 30, 2017, the Indiana Department of Revenue determined that an out-of-state corporation doing business in Indiana and worldwide was entitled to a reduction of its Indiana sales factor because certain sales in foreign jurisdictions should not have been sourced...

State Tax Developments: Captives

Recent developments in several key states, including Illinois, New York and Minnesota, may impact many captive insurance companies. These states are moving to include captive insurance companies in corporate income tax combined returns with parents and affiliates. The effect of combination is to disallow...

Don't Get Your Hopes Up - Maryland Letter Ruling Process is Hardly a Done Deal

In recent years, the tax community has engaged in an effort to promote transparency in tax administration. This effort culminated in Maryland with the passage of Senate Bill 843 by the 2016 General Assembly and was enacted in Chapter 582 of the Acts of 2016 (the “Act”). Included in a statute...

DC Office of Tax and Revenue Launches New QHTC Sales and Use Tax Exemption Application/Pre-Certification Process

On November 1, 2017, the District of Columbia will begin implementing a new sales and use tax exemption application process for Qualified High Technology Companies (QHTCs). The new application procedure signifies a shift to essentially a pre-certification process and creates new documentation requirements...

The State and Local Tax Implications of Federal Tax Reform

On November 2, 2017, Republicans in the House of Representatives released their much-anticipated tax reform bill. The Tax Cuts and Jobs Act proposes numerous changes to the Internal Revenue Code, many of which will have an impact on taxpayers’ state and local tax liabilities. Most states conform...

Watch Your Step: New York City Real Property Transfer Tax Imposed Under Step Transaction Doctrine

By Dmitrii Gabrielov and Tim Gustafson The New York State Supreme Court, Appellate Division, affirmed the New York City Tax Appeals Tribunal’s (Tribunal) determination that certain real estate transactions were subject to the New York City Real Property Transfer Tax (RPTT) under the step transaction...