Tax Law

Recent Posts

Maine Takes a Jumbo Slice of Taxpayer’s $3.6 billion Frozen Pizza Business Sale
Posted on 23 Jun 2020 by Eversheds Sutherland LLP

The Maine Supreme Judicial Court recently held that a taxpayer was not entitled to alternative apportionment for approximately $3 billion in gains earned from the sale of a business unit. The taxpayer was a food and beverage manufacturer that sold its... Read More

Michigan Supreme Court Rules Service Revenues Must be Sourced to the Location where the Services are Performed for City Income Tax Purposes
Posted on 11 Jun 2020 by Eversheds Sutherland LLP

The Michigan Supreme Court held that revenue from the performance of services must be sourced to the location where the service provider’s employees performed the work, not where the services were delivered, for purposes of the City of Detroit’s income... Read More

Birds of a Feather Must Flock Together: Oregon Tax Court Holds that Airlines in a Unitary Group Must Aggregate Departure Data
Posted on 18 May 2020 by Eversheds Sutherland LLP

On February 28, 2020, the Oregon Tax Court held that multiple airlines operating as a unitary business should aggregate not only transportation revenue but also other metrics, such as departure ratios, that are factored into the apportionment formula... Read More

Cleared for Takeoff: Texas Supreme Court finds Jet Sales Properly Sourced out of State
Posted on 14 May 2020 by Eversheds Sutherland LLP

The Texas Supreme Court held that a defense contractor was entitled to a refund of franchise tax because it had incorrectly sourced certain sales of military aircraft made to foreign governments to Texas on its originally-filed returns for the 2005 through... Read More

Taxpayer Dials the Wrong Number: New Jersey Court Holds Phone Company Sourcing Rule Inapplicable
Posted on 17 Mar 2020 by Eversheds Sutherland LLP

On January 9, 2020, the New Jersey Superior Court, Appellate Division, upheld a New Jersey Tax Court decision that income, or “receipts,” earned by a taxpayer from providing broadcast fax, email and voice messaging services were performed within New Jersey... Read More

Your customer is not your customer – California Office of Tax Appeals (OTA) finds that a nonresident did not have California sourced income
Posted on 9 Jan 2020 by Eversheds Sutherland LLP

The California Office of Tax Appeals held that pursuant to market-based sourcing rules, a nonresident individual did not derive California sourced income and was not required to file a California return or pay personal income tax. The taxpayer resided... Read More

California – OTA Holds You Can Have All of VAT (in the Sales Factor Denominator)
Posted on 27 Nov 2019 by Eversheds Sutherland LLP

On October 3, 2019, California’s Office of Tax Appeals (OTA) held that value-added tax (VAT) imposed on the provision of services is included in the sales factor of California’s apportionment formula. The taxpayer, filing on a worldwide unitary basis... Read More

Indiana Department of Revenue Finds Out-of-State Pharmacy Benefit Management Provider Must Include Income from Drug Sales to Indiana Customers in Sales Factor
Posted on 25 Mar 2019 by Eversheds Sutherland LLP

In a letter of finding, the Indiana Department of Revenue concluded that a pharmacy benefit management provider was required to include in its sales factor receipts from prescription drugs sold to Indiana customers. The taxpayer contracted with insurance... Read More

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

Texas Comptroller: Sales of Fuel Oil to Foreign Ships in Texas Waters Are “Texas Sales” for Apportionment Purposes
Posted on 28 Feb 2019 by Eversheds Sutherland LLP

The Texas Comptroller determined that a taxpayer was required to include in its sales factor numerator its receipts from sales of bunker fuel oil to foreign ships in Texas ports. The taxpayer argued that the sales were not from “business done” in Texas... Read More

Washington Sources ATM Card Processor’s Receipts to the Location of its Customers’ Business Activities for B&O Tax
Posted on 2 Feb 2019 by Eversheds Sutherland LLP

The Washington Department of Revenue Appeals Division ruled that for B&O apportionment purposes under the “services and other activities” tax classification, an out-of-state automated teller machine (ATM) card transaction processor’s receipts are... Read More