LexisNexis® Legal Newsroom
A Pinch of SALT: What New York Can Learn From California's Combined Reporting History

As part of a sweeping law change, New York will require taxpayers to use a water’s-edge combined reporting method when filing corporate income tax returns beginning January 1, 2015. In this edition of A Pinch of SALT, Sutherland tax attorneys Carley A. Roberts, Pilar Mata, Stephanie Do and...

Sutherland SALT's Prentiss Willson Receives the California Bar's Benjamin F. Miller Award

pleased to announce that Prentiss Willson has been recognized with the Benjamin F. Miller Award from the State Bar of California Taxation Section. He will accept his award at a luncheon on November 6 at the California Tax Policy Conference. The Benjamin F. Miller Award is given annually to recognize...

You're Gonna Have to Do More Than That: Passive Investment in California Limited Liability Company Insufficient to Meet Statutory Nexus Threshold

By Evan Hamme and Timothy Gustafson A California Superior Court held that passive membership in a limited liability company (LLC) is insufficient to meet California’s statutory “doing business” standard. In Swart Enterprises, Inc. v. California Franchise Tax Board, an Iowa corporation...

California Real Property Deal Did Not Cause Change in Ownership

By Zachary Atkins and Douglas Mo A California Court of Appeal held that the sale of real property to a lessee having an original lease term of more than 35 years did not result in a change in ownership triggering reassessment for property tax purposes. Proposition 13 established a 2% per-year ceiling...

Hubba, Hubba, Hubba! Money, Money, Money! Who Do You Trust? California and North Carolina Differ on the Constitutionality of Taxing Undistributed Foreign Trust Income

By Michael Penza and Timothy Gustafson The California Franchise Tax Board (FTB) issued an information letter explaining that a trust is taxable in California if any of the following three conditions are met: (1) the trust has income from California sources; (2) a trustee is a resident of California;...

Residence Precedence? California State Board of Equalization Considers Issuing Formal Opinion in Taxpayer-Favorable Residency Ruling

By Robert P. Merten III and Timothy A. Gustafson The California State Board of Equalization (BOE) has issued a rare ruling on residency topics, finding in favor of individual taxpayers on two issues. First, the BOE found that the taxpayers established domicile in Washington three months earlier than...

Hog Wild: In Harley-Davidson, California Court of Appeal Finds Discrimination, Affirms Nexus

By Michael Penza and Andrew Appleby The California Court of Appeal held that California’s disparate treatment of intrastate and interstate unitary businesses discriminated against interstate commerce. California requires taxpayers engaged in a unitary business within and without California to...

Bad Day for California as TTA Sales Tax Exemption for Software Is Broadly Reaffirmed by Appellate Court - Will Taxpayer Refund Claims Now Move?

In a significant rebuff of the California State Board of Equalization (BOE), the California Second District Court of Appeal held that a manufacturer’s sale of software on tangible media was exempt from sales tax under the technology transfer agreement (TTA) statutes. Lucent Technologies, Inc. v...

Sutherland Expands State and Local Tax Practice with Four Attorneys; Continues Growth in Sacramento Office

We are pleased to announce that Sutherland has expanded its premier State and Local Tax (SALT) practice with the addition of four associates: Elizabeth S. Cha and Samantha K. Trencs in Washington DC, Nicholas J. Kump in Sacramento, and Hanish S. Patel in Atlanta. The new group joins Sutherland’s...

What's Good for Today's Goose Is Not So Good for Yesterday's Gander: California Board of Equalization Rejects Taxpayer's Retroactive Economic Nexus Argument

By Evan Hamme and Timothy Gustafson The California State Board of Equalization (Board) unanimously rejected Craigslist, Inc.’s (Craigslist) argument that California’s adoption of a factor-presence nexus regime in 2009 reflected pre-existing federal constitutional nexus standards pursuant...

Legal Alert: California Supreme Court Holds Multistate Tax Compact is Not Binding

On December 31, 2015, the California Supreme Court closed the book on California’s Multistate Tax Compact election saga, unanimously holding that the Compact is not a binding contract among its members and the State was not bound by its provisions before the State’s repeal of the Compact...

California BOE Adopts Beneficial Amendments to Sales Tax Exemption for Manufacturing and R&D Equipment Over Department of Finance's Objections

By Samantha Trencs and Amy Nogid The California Board of Equalization (BOE) voted to adopt an amendment to Ca. Code Regs. tit. 18, § 1525.4, to resolve a statutory ambiguity by clarifying that a taxpayer will qualify for the partial sales and use tax exemption available for certain manufacturing...

No Ifs, Ands, or Buts: California Court Invalidates Regulation Limiting Consultant Contingent Fee Arrangements

By Olga Goldberg and Marc Simonetti The California Superior Court struck down a regulation that imposed a de facto ban on contingent fee arrangements between businesses applying for the California Competes tax credit and consultants. The Court ruled that the regulation exceeded the scope of the statute...

Alabama Tax Tribunal Rules That Freight Charges Not Subject to Sales Tax

By Jessica Eisenmenger and Leah Robinson The Alabama Tax Tribunal ruled that freight charges paid by the seller but passed through on an invoice to the customer are not subject to sales tax. Alabama law exempts shipping and freight charges “paid by the purchaser” from sales tax. Chief Tax...

Sourcing the Ticker Tape: California Ruling Addresses Sourcing of Financial Information Provider's Services

By Hanish Patel and Marc Simonetti In a Chief Counsel Ruling, the California Franchise Tax Board (FTB) ruled that, for purposes of determining its sale factor, a financial information provider should source the sales of its information services based on where the taxpayer’s customer receives...

Sutherland Partner Carley Roberts Recognized as One of Tax Analysts' 2016 Outstanding Women in Tax

Sutherland is pleased to announce that Partner Carley A. Roberts has been recognized as one of the “Outstanding Women in Tax” by T ax Analysts , a leading publisher of tax news and analysis. A group of Tax Analysts editors, reporters and board members reviewed more than 300 submissions...

More Taxes Coming in Oregon?

By Eric Coffill New Oregon Gross Receipts Tax Proposal. On December 14, 2016, the group behind Measure 97 (which was defeated at the November 2016 general election), released a booklet setting forth its 2017 legislative proposals. The document includes the basic structure for a new “$100 Million...

California Appeal Court Upholds $2.8 Million Refund for Comcast on Unitary Business Issue

By Chelsea Marmor and Madison Barnett The California Court of Appeal upheld Comcast’s $2.8 million franchise tax refund, determining that: (1) Comcast and its subsidiary QVC were not unitary, such that QVC was properly excluded from Comcast’s combined group, and (2) a termination fee Comcast...

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...

FTB to Pay Interest on Corporate Tax Refunds

By Eric Coffill FTB announced that it will pay 1% interest on corporation tax overpayments for the period July 1, 2017 through December 31, 2017. Previously, the last time FTB paid interest on corporation tax overpayments (i.e., refunds) was for the period ending June 30, 2009 (for which the interest...

California Legislative Committee Holds Informational Hearing on Lucent and Administering California's Technology Transfer Agreement Law

On January 30, 2017, the California Legislature Assembly Committee on Revenue and Taxation held an informational hearing on “Life after Lucent : Administering California’s Technology Transfer Agreement Law.” The California State Board of Equalization and the Board’s staff are...

Expanding the Water's Edge: Four Trends to Watch in International Issues in State Taxation

Traditionally, mandatory worldwide combined reporting was the state corporate tax issue of most concern to companies engaged in international business. States are now moving toward a water’s-edge unitary combination method for both US and foreign-based companies. In his article for the Spring...

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: Taxes, Fees and "Something Else": California's Morning Star Decision

On April 6, the Third District California Court of Appeal decided Morning Star Packing Company v. California Air Resources Board , which challenged the state’s cap-and-trade auction process as an unconstitutional tax. View this latest edition of A Pinch of SALT , by Eversheds Sutherland (US) attorneys...

Imposing Documentary Transfer Taxes in California after Ardmore

Rarely does a subject as mundane as a documentary transfer tax become worthy of its own article. However, the June 29, 2017, decision of the California Supreme Court in 926 North Ardmore Avenue LLC v. County of Los Angeles is a worthy exception. Read this Law360 article by Eversheds Sutherland (US) attorneys...