LexisNexis® Legal Newsroom
    Treasury Weighs In On Border Adjustment Tax

    A U.S. Department of the Treasury study, released Wednesday, on a novel tax reform strategy being touted by some Republican lawmakers found that a border adjusted tax framework could have yielded a larger tax base than the current system between 2004 ...read more

    NYC Administrative Law Judge Determines Long Distance Telecommunications Service Fees Exempt from Utility Tax

    On December 29, 2016, a New York City administrative law judge (ALJ) determined that Sprint’s long distance telecommunications service fees were exempt from the City’s Utility Tax. In the Matter of the Petitions of U.S. Sprint Communications Co., LP, TAT (H) 14-12 (UT) et al. Sutherland represented Sprint in the matter.

    • The ALJ concluded that the Utility Tax enabling statute—which limits the scope of the Utility Tax to transactions occurring within City limits—applies to “transactions” and not “services.” As such, once an exempt transaction has been identified, the exemption applies to the transaction itself plus all revenue associated with the transaction.
    • Applied to telecommunications services, the ALJ determined that exempt long distance telecommunications transactions include not only the charge for the long distance telephone call itself but also charges related to the long distance transaction, regardless of the billing method.
    • Additionally, charges for Internet access are exempt from the Utility Tax pursuant to the Internet Tax Freedom Act, as the City historically did not tax such charges prior to the moratorium on Internet taxes imposed by the Internet Tax Freedom Act.

    View the full Legal Alert.

    A Federal Crackdown On Tax Zapper Software

    Revenue suppression or “tax zapper” programs delete some or all of a restaurant’s cash transactions and then reconcile the books of the business, lowering the firm's tax bill. States have battled zappers for years, but the case of United States v ...read more

    IRS Releases Final Rules Affecting 2010 Estate Beneficiaries

    The IRS and the U.S. Department of the Treasury finalized regulations Thursday that take into account years-old legislation affecting how to calculate the basis in property transferred to beneficiaries from individuals who died in 2010, wrapping up a ...read more

    Snapchat Tax Move Signals UK’s Competitive Edge Against EU

    Snapchat owner's recent announcement it was rerouting some of its advertising revenue through London was short on details, but experts are speculating that the move undoubtedly comes with tax benefits as the U.K. prepares to compete against the European ...read more

    Attracting And Retaining The Millennial Lawyer

    Instead of trying to change the new workforce to follow a law firm's existing processes and procedures, perhaps it's time for firms to start changing their processes and procedures to better accommodate the mentality of this next generation of ...read more

    Feds Say Sports Agent Trying To Distract In Smuggling Trial

    The U.S. government asked a Florida federal court Wednesday to bar a sports agent who allegedly participated in a $16 million scheme to smuggle Cuban baseball players into the U.S. from distracting the jury by impeaching the law enforcement investigation ...read more

    Akerman Nabs Former CBS Exec For NY Tax Group

    A former vice president of CBS Inc. has accepted a partner position in the New York office of Akerman LLP, leaving his current management role at Mayer Brown LLP to lend his experience counseling companies on everything from international to local tax ...read more

    IRS Issues Long-Awaited Proposals For Partnership Audits

    The Internal Revenue Service on Wednesday released highly anticipated guidance for partnerships wondering how the agency will interpret and implement rules under a new audit regime passed by Congress more than a year ago. ...read more

    Michigan Co. Can't Get Tax Refund Despite Law Change

    The Michigan Court of Appeals denied an industrial services company's request for a tax refund, finding Tuesday that a law change that would have narrowed down the tax years contributing to the company's $1.3 million liability did not apply to ...read more

    Ex-NY Sen. Leader Gets 5 Years For Obstruction, Lying To FBI

    The former minority leader of the New York state senate on Wednesday was sentenced to five years in prison following his conviction for obstruction of justice and lying to federal agents in connection with a corruption case over his alleged embezzlement ...read more

    Kimberly-Clark Can't Use Tax Compact For $3.2M Mich. Refund

    A Michigan appeals court has unanimously denied Wisconsin-based global manufacturing giant Kimberly Clark Corp.’s bid for a $3.2 million tax refund from the state Department of Treasury, agreeing with a lower court that the company can’t use ...read more

    Bill To Reduce Corporate Tax Rate Introduced By Pa. Rep.

    Pennsylvania state Rep. Jason Ortitay announced on Wednesday that he had re-introduced legislation to gradually reduce Pennsylvania's corporate net income tax, which is currently the second-highest in the country. ...read more

    Treasury's Tax-Exempt Organizations Expert Joins Steptoe

    Steptoe & Johnson LLP has given its Tax Group a boost with the addition of the former exempt organizations lawyer and policy adviser at the U.S. Department of the Treasury’s Office of Tax Policy as a partner in the firm. ...read more

    Art Market Tax Probes Make Domestic Freeports Appealing

    As home to high art auction prices and hefty sales and use taxes, New York City has seen its share of art-related tax fraud. Now, as law enforcement scrutinizes tax compliance in the art world, collectors may wish to avoid New York sales taxes legally ...read more

    It’s Time To Change The Law Firm Business Model

    Every year, statistics reveal very little change in the number of women and minorities in the ranks of partnership. So how do law firms change this painfully slow rate of progress? It takes more than adding a diversity policy or a women’s leadership program ...read more

    Sutherland SALT Scoreboard Publication - Fourth Quarter 2016

    Sutherland SALT releases the fourth edition of the “SALT Scoreboard,” a quarterly publication that tracks significant state tax litigation and controversy developments and tallies the results of taxpayer wins and losses across the country. Our quarterly publication features Sutherland’s observations regarding important state tax decisions and will identify trends by issue, state and forum as they emerge during the year. This issue of the SALT Scoreboard includes Sutherland’s year-end observations for 2016, insights regarding the Ohio Supreme Court’s decision in Crutchfield Corp. v. Testa, and a spotlight on New Jersey. We are closing the book on 2016 and are gearing up for a fresh start in 2017. We have reset our tallies and are tracking the results as they are issued in the new year.

    View our Sutherland SALT Scoreboard results from the fourth quarter of 2016!


    Del. Poses Bill To Limit Unclaimed Property Collection

    Amid a high court battle between Delaware and several other states over who gets to keep abandoned MoneyGram checks, a Delaware state senator has introduced a bill that claims to make the state’s unclaimed property laws fairer and more in line with those ...read more

    If Not Replaced, ACA Repeal Could Double Premiums: CBO

    With Congressional Republicans working toward repealing the Affordable Care Act, the nonpartisan Congressional Budget Office said Monday that scrapping only parts of “Obamacare” could result in 32 million people losing health insurance and ...read more

    South Dakota Remote Sales Tax Suit Returns To State Court

    A group of online retailers being sued by South Dakota under its new law enforcing sales tax collection on certain out-of-state businesses was dealt a blow Tuesday when a federal judge punted the lawsuit back to state court. ...read more

    Pa. GOP Sen. Floats 5% Natural Gas Tax To Fund Pensions

    A Pennsylvania Republican state senator on Tuesday said he intends to reintroduce legislation that would impose a 5 percent levy on natural gas producers in the state and direct the receipts to offset the state’s unfunded pension liabilities. ...read more

    IRS Finalizes Corporate-Level Tax On Certain REIT Transfers

    A new U.S. Internal Revenue Service regulation to impose a corporate-level tax on certain property transfers to real estate investment trusts and regulated investment companies will go into effect Wednesday. ...read more

    Reed Smith Adds State Tax Controversy Atty In NY

    Reed Smith LLP announced the addition of a new corporate tax controversy partner for its state tax group in New York, with the hiring of a former Morrison & Foerster LLP partner. ...read more

    IRS Finalizes Anti-Inversion Rule, With Some Tweaks

    The Internal Revenue Service has finalized rules meant to make it harder for U.S. businesses to lessen their tax burden by merging with foreign companies, although the agency tweaked the requirements to meet certain exceptions to the regulations. ...read more

    California Court of Appeal Holds Doing Business ≠ Any Activity Engaged In for Pecuniary Gain

    On January 12, 2017, the California Court of Appeal held in a published opinion that a taxpayer passively holding a 0.2 percent interest in a California-based limited liability company (CA LLC) was not “doing business” in the state for purposes of being subject to California’s franchise tax. The court reasoned as follows:

    • Under California Revenue Code Section 23101, “doing business” means “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit” (emphasis added) and the taxpayer did not “actively” engage in any transaction because it had held its investment in the CA LLC for several years prior to the tax year in issue and played no role in the CA LLC’s‎ operations.
    • The CA LLC’s election to be treated as a partnership for federal income tax purposes did not mean that the taxpayer should be treated as a general partner (which would impute the partnership’s activities to the taxpayer and cause the taxpayer to be doing business in California) because a tax election for one purpose does not necessarily control for all taxation purposes in all circumstances.
    • After resolving the case on statutory grounds, the court expressly declined to consider any constitutional issues.

    View the full Legal Alert.