ABA/IPT State and Local Tax Seminars – March 31st through April 4th in New Orleans, Louisiana

Posted March 6, 2014 by SALT Blawg
Categories: Louisiana

Tags: ,

 by Jennifer Weidler

The ABA Section of Taxation and the Institute for Professionals in Taxation will be holding a week-long opportunity for practitioners to receive CLE and CPE credit while learning about current state and local tax issues facing different businesses and industries.  The seminars will be held in New Orleans, Louisiana.  According to the ABA/IPT, the seminars are designed for, “attorneys, accountants, tax directors, state and local tax managers, government tax officials, appraisers, property tax managers, commercial and industrial property managers, and others interested in state and local income, sales, use, and ad valorem taxation.”  The seminars will take place from March 31, 2014 through April 4, 2014.  Each seminar is one and one-half days: the Income Tax Seminar will be held from March 31st through April 1st; the Sales/Use Tax Seminar will be held from April 1st through April 2nd; and the Property Tax Seminar will be held from April 3rd through April 4th.

Stewart M. Weintraub, shareholder and Chair of the SALT practice at Chamberlain Hrdlicka, is the Overall Chair for the three ABA/IPT Seminars.  During the Income Tax program Mr. Weintraub will be moderating a panel discussing “When to Settle – Audit Strategies to Avoid Litigation” and during the Property Tax program he will be a panelist discussing Current Developments in Property Tax.

For more information about the seminars, see the brochure: https://meetings.abanet.org/meeting/tax/IPT14/media/2014%20ABA-IPT%20Brochure.pdf

For general and hotel information and to register for the program, see: http://meetings.abanet.org/meeting/tax/IPT14/

Upcoming Event: Stewart Weintraub to Participate in ABA Tax Section Panel discussing State and Local Tax Issues Regarding Sale of a Business

Posted August 29, 2012 by Stewart Weintraub
Categories: Event

  by Stewart Weintraub

I am pleased to share with you that I will be speaking at the upcoming meeting of the ABA Tax Section State & Local Tax Committee, in Boston MA.  The panel presentation is titled: “Selling Your Business: Where’s Our Share?  State Taxes on the Sale of an Interstate Business or Subsidiary,”.

From AmericanBar.org:

“The panel will discuss the key SALT issues that arise from the sale of a business or a subsidiary, including stock sales that are treated as asset sales under IRC Section 338. The panel will review how these transactions were treated under UDITPA’s business income definition and under current state laws that vary from UDITPA, including a discussion of the key cases and pending litigation.  The panel will also address apportionment factor treatment, including pending changes in apportionment definitions and rules under consideration by the Multistate Tax Commission and how they might impact how proceeds from the sale of a business or subsidiary would be treated.”

The ABA Section of Taxation and the Trust and Estate Law Division of the ABA Section of Real Property, Trust and Estate Law holds the 2012 Joint Fall CLE Meeting to bring attorneys together to discuss important tax policies, regulations and future expectations within the trust and estate practice.

If you are interested, I hope you will attend my panel. You may register at this link here.

 

Weekly Blog Update for Week of 4/20: Alabama Rules in Favor of Online Travel Companies; Georgia Enacts “Amazon” Legislation; STEB Announces Revised Ratio for Philadelphia County; New Mexico Finds Barnes & Noble Trademarks Establish Nexus…and more.

Posted April 23, 2012 by SALT Blawg
Categories: Alabama, Arizona, Georgia, Michigan, New Mexico, Pennsylvania

 by Jennifer Weidler

ALABAMA

Alabama House Approves Legislation to Update Taxpayer’s Bill of Rights

The Alabama House approved a substitute version of a Bill, HB 105, which would update the Alabama Taxpayer’s Bill of Rights with regard to the protocols for handling taxpayer appeals.

Alabama Supreme Court Finds for Online Travel Companies in Tax Suit

The Alabama Supreme Court affirmed a lower court’s summary judgment decision, which held that online travel companies are not engaged in the business of renting rooms or lodgings or furnished accommodations for the purposes of imposing the municipal lodgings tax upon them. For more detailed coverage of this case, click here. We previously discussed a similar holding in the case of Expedia in Philadelphia.

 

ARIZONA

Arizona House Votes to Delete Use Tax Declaration from Income Tax Forms

The Arizona House has voted to delete the use tax declaration line from its state income tax forms.SeeSB 1214.  Pursuant to SB 1214, the use line would be deleted for tax year 2012 forward.  While the specific use tax declaration line would be deleted from the income tax forms, Arizona residents would still owe use tax on their purchases of goods from out-of-state.

 

GEORGIA

Georgia Governor Signs “Amazon” Legislation

The Georgia Governor signed “Amazon” legislation, HB 386, which establishes click-through nexus in the state.

 

MICHIGAN

Michigan Tax Tribunal Finds Corporate Officer Personally Liable for Tax Deficiency of Company

The Michigan Tax Tribunal held that an individual corporate officer was liable for a company’s sales tax deficiency because the individual was a corporate officer during the relevant time period and failed to prove that he resigned, relinquished or otherwise absolved himself of responsibility for filing and paying the taxes.  As such, the court held that there was subject to corporate officer liability for the taxes at issue.

 

NEW MEXICO

New Mexico Court Holds Barnes & Noble Trademarks Sufficient to Establish Nexus

A New Mexico appellate court has held that a taxpayer who was an online bookseller had substantial nexus through the in-state use of Barnes & Noble trademarks.  Barnes & Noble did not own or lease property in the state, nor did it have any temporary or permanent employees therein. Although the taxpayer was a separate limited liability company, the court found that the in-state activities that were performed under Barnes & Noble trademarks were sufficient to establish nexus since Barnes & Noble’s in-state retail stores created goodwill behind the trademarks where the trademarks were used on and in its in-state stores.  Moreover, the online retailer created goodwill by further advertising for Barnes & Noble and selling gift cards which could be used at the online store or at the physical Barnes & Noble locations.

 

PENNSYLVANIA

Commonwealth Court Holds Company Eligible to Compute Franchise Tax Using Holding Company Apportionment Method

The Commonwealth Court held that a company whose activities consisted of providing corporate oversight to twenty-two (22) wholly owned subsidiaries fell within the definition of a “holding company” where the goodwill that it recorded on the corporation’s balance sheets as an asset was included in its subsidiaries’ actual stock value.  As such, the court held that the company was eligible to compute the franchise tax utilizing the 10% holding company apportionment method.

STEB Announces Revised Common Level Ratio for Philadelphia County for 2010

The State Tax Equalization Board (“STEB”) issued an announcement revising its certified Common Level Ratio (“CLR”) for tax year 2010 in relation to Philadelphia County.  STEB revised the CLR to 25.2% from 18.1%.  In order to arrive at the revised figure, STEB used revised data that was submitted by Philadelphia County.

Alabama Supreme Court Rules in Favor of Orbitz and Other Online Travel Companies; Online Travel Companies Not Subject to Lodgings Tax

Posted April 23, 2012 by SALT Blawg
Categories: Alabama, Hotel Occupancy Tax, Hotel Tax

Tags: , , , , ,

 by Jennifer Weidler

The Alabama Supreme Court recently addressed the issue of whether online travel companies are liable for the payment of municipalities’ lodgings tax.SeeCity of Birmingham, et al. v. Orbitz, LLC, et al., Dkt. No. 1100874 (Ala. S. Ct. 2012).The appellants in the case were nine (9) Alabama municipalities and the appellees were sixteen (16) online travel service companies and related entities.

In their complaint, the municipalities alleged that municipal ordinances were enacted which imposed a lodgings tax on hotels located within their city limits; that the municipal lodgings tax is in addition to a State lodgings tax; and that the tax is calculated as a percentage of the amount charged by such hotels for the use of a room.

The online travel companies’ business model involves a customer making a room reservation through the online service, the customer is charged an amount for (1) the occupancy of the hotel room, (2) a lodgings tax recovery charge, and (3) an additional amount retained as compensation for the services.  Thereafter, the online travel company is billed by the hotel based upon a contract between the on line travel company and the hotel for the right to offer reservation services to guests who would like to make a reservation at the hotel.  The hotel bills the online travel company for the price of the room and the state and local tax thereon.  The hotel then pays the lodgings taxes to the State and the appropriate municipality.

The municipalities alleged that the lodgings tax should be imposed not only upon the hotels for the amount they charge as rent for the occupancy of their hotel rooms, but additionally upon the amount that online travel companies charge the customer for their online services.

The Alabama Supreme Court disagreed with the municipalities and found forthe online travel companies.  In so doing, it reasoned that the statute and ordinances were not ambiguous, and clearly imposed the lodgings tax upon every person, “engaging in the business of renting or furnishing any rooms, in any hotel.”  The tax is fixed as a percentage of “the charge for such room…including the charge of use or rent of personal property and services furnished in such room.”  Additionally, the court found that the DOR specifically promulgated a rule affirming that only persons who operate a hotel are persons who rent or furnish rooms.  As such, the court found that the online travel companies do not operate a hotel in any of the municipalities and cannot be said to have engaged in the business of renting or furnishing rooms for purposes of the lodging tax.

Numerous cases have been brought in various states and jurisdictions throughout the country touching on the same or similar issues with varying results.  For review of a similar holding by a different court, see our detailed posting regarding the Pennsylvania Commonwealth Court’s holding relating to Expedia and the Philadelphia Hotel Tax.

Weekly Blog Update for Week of 3/23: Connecticut Supreme Court Reverses Scholastic Decision; Georgia and Marlyand Lawmakers Address Amazon Bills; Kansas Legislature Approves Single-Sales-Factor Apportionment Bill…and More

Posted March 26, 2012 by SALT Blawg
Categories: Connecticut, Georgia, Indiana, Kansas, Maryland, Minnesota, South Carolina, Tennessee

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 by Jennifer Weidler

 

CONNECTICUT

Connecticut Finds Scholastic Used Teachers to Sell Books Creating Nexus to Subject it to Sales Tax

The Connecticut Supreme Court reversed a lower court’s decision and held that Scholastic Book Clubs, Inc. was subject to state sales tax because in-state school teachers acted as its representatives, thereby creating the requisite nexus to justify imposing the tax.  For prior coverage of this issue, click here.

 

GEORGIA

Georgia Lawmakers Approve “Amazon” Bill

The Georgia Senate approved legislation, HB 386, which would create click-through nexus and establish a phase-out of the sales tax on energy used in manufacturing.

 

INDIANA

Indiana Supreme Court Holds Out-of-State Service Provider’s Promotional Materials Subject to Tax

The Indiana Supreme Court held that an out-of-state online service provider, AOL, Inc., was subject to Indiana use tax on promotional materials that it distributed to in-state individuals.  The court found that the transactions through which AOL obtained the promotional materials it sent to in-state residents from its assembly houses and letter shops constituted retail transactions and were therefore subject to state tax once AOL used the property in-state.

 

KANSAS

Kansas Senate Approves Single-Sales-Factor Legislation

The Kansas Senate approved legislation, HB 2157, which would enact a single-sales-factor apportionment method for certain corporations relocating to the state.  The apportionment method would be available beginning in tax year 2013 for those businesses with no employees in the state and with no real or tangible personal property in the state prior to January 1, 2013.

 

MARYLAND

Maryland Legislature Strips Bill of “Amazon” Language

The Maryland House amended legislation, SB 523, by pulling language pertaining to an “Amazon” law.  The amendment deleted language that would have required remote sellers to collect sales taxes on purchases by in-state buyers.  The House also revised the proposed individual income tax increase.

 

MINNESOTA

Minnesota Legislature Passes Bill to Phase-Out State’s Business Property Tax

The Minnesota House of Representatives passed legislation, HF 2337, which would phase-out the state’s business property tax.  The legislation would gradually reduce the tax, until an ultimate elimination of the tax during tax year 2025.  The legislation would also offer a tax credit in lieu of the current foreign operating corporation deduction.

 

SOUTH CAROLINA

South Carolina Publishes Revenue Ruling on Software

The South Carolina Department of Revenue issued a Revenue Ruling dealing with sellers who sell and deliver software via a laptop to the buyer’s location.  Where the seller downloads the software via the internet or other wireless connection and then terminates the connection, taking the laptop when the download is complete and leaving no tangible software behind, the transaction is not subject to South Carolina sales tax.

 

South Carolina Supreme Court Rules for Taxpayer in Bi-furcated Apportionment Case; Places Burden on DOR

In a victory for the taxpayer, the South Carolina Supreme Court held that where the South Carolina Department of Revenue (“DOR”) attempts to deviate from the standard method of apportionment, the DOR must bear the burden of proving both that the standard method should not be used and that the alternative method is reasonable and more appropriate than any of the opposing methods.

 

TENNESSEE

Tennessee Legislature Considers Phase-Out of Stat’s Inheritance Tax

The Tennessee General Assembly passed legislation, SB 3762/HB 3760, which would phase-out the state’s inheritance tax.  Pursuant to the legislation, the tax would be repealed by 2016.

Weekly Update for 3/16

Posted March 19, 2012 by SALT Blawg
Categories: Arizona, Income Tax, Indiana, Kansas, Maryland, Michigan, New Jersey, Pennsylvania, Sales and Use Tax, Tennessee, Texas

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 by Jennifer Weidler

ARIZONA

Arizona Court Holds that Cooperative Direct Mail Advertising is Not Subject to Use Tax

The Arizona Appeals Court held that cooperative direct mail advertising was not subject to the state’s use tax, since the dominant purpose of the taxpayer’s business was to obtain nontaxable design, mailing and printing services, and not tangible personal property.

INDIANA

Indiana Legislature Passes Bill to Phase Out Inheritance Tax

The Indiana General Assembly has passed legislation, SB 293, which will phase out the state’s inheritance tax, gradually reducing the rate until it hits zero during 2022.   The phase out would be retroactive to January 1st.

KANSAS

Kansas House Approves Bill to Alter State Income Tax Structure

The Kansas House approved legislation, SB 177, which would make several modifications to the state’s income tax structure.  The legislation includes changes to the state’s sales tax exemption and business income exemption provisions, formulaic individual income tax rate reductions, Rural Opportunity Zone expansions, tax credits and more.

MARYLAND

Maryland Senate Approves “Amazon” Law

The Maryland Senate has approved legislation, SB 523, which includes an “Amazon” law and an income tax increase.  The bill would add three additional tax brackets and rates and would impose a flat tax on those filers making more than $500,000.  The bill also contains affiliate nexus/”Amazon” language.

MICHIGAN

Michigan Court of Appeals Finds Taxpayer Could Not Collaterally Attack Underlying Assessment

The Michigan Court of Appeals held that a taxpayer could not appeal a use tax assessment, as the sole shareholder and responsible corporate officer of a retailer, where the taxpayer’s appeal was untimely and where he was statutorily precluded from collaterally attacking the underlying assessment.

NEW JERSEY

New Jersey Legislature Passes “Amazon” Law

The New Jersey Assembly has passed legislation, A 2608, which would give Amazon.com a temporary sales tax collection exemption in exchange for job creation.  Pursuant to the bill, those retailers that make capital investments of at least $130 million and create at least 1,500 full-time jobs in the state would not have nexus until July 1, 2013.

New Jersey Legislature Passes Bill Expanding State’s Nexus Rules

The New Jersey Assembly passed legislation, A 2608, which would expand the state’s nexus rules by creating nexus for sellers that use in-state affiliates to perform activities to aid in business development or to maintain a New Jersey business market.  Moreover, the bill would create nexus for out-of-state businesses with distribution centers or subsidiaries in the state.

PENNSYLVANIA

Philadelphia DOR Releases 2012 KOZ Booklet

The Philadelphia Department of Revenue has released its 2012 Philadelphia Keystone Opportunity Zone Programs Booklet, which provides guidance on calculations, credits, two-factor apportionment formula, and more.

TENNESSEE

Tennessee General Assembly Approves Bill to Exempt Amazon from Tax

The Tennessee General Assembly passed legislation, HB 2370, which would temporarily exempt Amazon.com from collecting state sales tax.  Pursuant to the legislation, Amazon.com will build new facilities in the state and create thousands of jobs, in exchange for sales tax exemption through January 1, 2014.  The bill is now awaiting the Governor’s signature.

TEXAS

Texas Announces Amnesty Program Slated for June 2012

Texas has announced that it will offer a tax amnesty program for businesses, during which it will waive all interest and penalties for taxpayers that file or amend delinquent tax reports and pay all taxes due.  Reports originally due prior to April 1, 2012 are eligible, and the amnesty program will run from June 12 through August 17, 2012.

Weekly Update for 3/9: Arizona Rejects Amazon Legislation, While New Jersey Considers Implementing Amazon Law; Missouri Considers Amnesty Legislation; Pennsylvania Considers Closing the “Delaware Loophole”…and more.

Posted March 12, 2012 by SALT Blawg
Categories: Arizona, California, Corporate Tax, Georgia, Illinois, Iowa, Missouri, New Jersey, New Mexico, Pennsylvania, Property Tax, Sales and Use Tax, Virginia, Wisconsin

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 by Jennifer Weidler

ARIZONA

Arizona Senate Rejects Proposed Amazon Legislation

The Arizona Senate rejected proposed Amazon legislation, SB 1338, which would have broadened Arizona’s definition of retailer to include any company with a warehouse in the state.

CALIFORNIA

California Revises Publication on Internet Sales, Incorporating eBooks and Apps

The California State Board of Equalization revised Publication 109 regarding Internet Sales, in order to provide guidance on the tax treatment of eBooks and apps.  According to the Publication, the transfer of a downloadable file such as an eBook or app is not a taxable transaction, without purchasing any physical storage medium.

GEORGIA

Georgia House Approves Legislation to Establish Tax Tribunal

The Georgia House of Representatives approved legislation, HB 100, which would establish a state Tax Tribunal in the state’s judicial branch.

ILLINOIS

Illinois Releases Information Letter of “Deal-of-the-Day” Transactions

The Illinois Department of Revenue issued an Information Letter providing guidance on the treatment of “Deal-of-the-Day” transactions.  For more detailed information, see the Information Letter.

IOWA

Iowa Court Grants Refund Relief for Illegal Taxation

The Iowa District Court ordered a refund of franchise fees that were collected in excess of the amount determined to be allowable for which the City of Des Moines could impose.  The court found that the refund was a constitutional remedy for the illegal taxation of the city’s residents.  The fact that the funds gathered from the illegal taxation were used wisely, legally and with the best intentions was not a defense.

MISSOURI

Missouri House Approves Amnesty Legislation

The Missouri House has approved legislation, HB 1030, which would offer a tax amnesty period, slated to run from August 1 to October 31, 2012.  The amnesty program would cover all taxes administered by the Department of Revenue and would waive penalties.  The amnesty program is projected to raise $75 million for the state.

NEW JERSEY

New Jersey Finds Nexus Based on Telecommuting Employee

The New Jersey Superior Court upheld a Tax Court ruling, which found that a foreign corporation was subject to the New Jersey Corporate Income Tax because it regularly and consistently permitted one of its employees to telecommute from her New Jersey residence.  Her full-time telecommuting was viewed as doing business in the state, thereby requiring the payment of the tax as well as the filing of corporate income tax returns in New Jersey.

New Jersey Introduces Amazon Legislation

Legislation, S 1762, has been introduced in New Jersey that would grant Amazon.com a temporary state sales tax collection exemption if it builds warehouses within the state.   Pursuant to the bill, distribution facilities built in the state after January 1, 2012 would not create nexus with the state until July 1, 2013, provided that Amazon.com creates at least 1,500 full-time jobs in the state and makes a capital investment exceeding $130 million.

New Jersey Court Affirms Value of Residential Property Where Owner’s Evidence was Insufficient

The New Jersey Tax Court affirmed the value of a residential property established by the assessment after finding that the owner’s evidence regarding comparable sales was insufficient to establish the true market value of the property.  Although the owner overcame the presumption of validity attached to the assessment of his property, he was unable meet his burden of proof with regard to establishing the true market value of the property.

NEW MEXICO

New Mexico Governor Vetoes Combined Reporting Legislation

New Mexico’s Governor vetoed legislation, SB 9, which would have established combined reporting in the state.  The bill would have required combined reporting for multistate retailers with a 30,000 square feet or large facility in New Mexico.  Additionally, it would have lowered the top corporate income tax rate from 7.6 percent to 7.5 percent.

PENNSYLVANIA

Pennsylvania Considers Legislation to Allow Counties to Institute Local Taxes to Reduce or Eliminate Property Tax

The Pennsylvania legislature is considering legislation, HB 2230, which would allow counties in the state to institute a local sales or income tax in order to reduce or eliminate the property tax.  Pursuant to the bill, county governments could ask voters to approve a sales or income tax, which would ultimately provide property tax relief.

Pennsylvania Considers Competing Legislation to Close “Delaware Loophole”

During January, legislation, HB 2150, was introduced that suggested a close to the “Delaware loophole.” For previous coverage of that bill, please click here.  Competing legislation is currently being drafted that will seek to create a broader add-back provision than that contained in HB 2150.

VIRGINIA

Virginia Governor Approves Legislation Phasing in Single-Sales-Factor

Virginia’s Governor has approved legislation, HB 154, which creates a phase-in of single-sales-factor apportionment for retailers.  The bill requires retailers to begin utilizing a triple-weighted sales factor beginning July 1, 2012 and a quadruple-weighted sales factor beginning July 1, 2012.  Finally, a single-sales-factor would be implemented beginning July 1, 2015.

WISCONSIN

Wisconsin Rules that Individual is Responsible for Portion of Company’s Tax Liabilities

The Wisconsin Tax Appeals Commission held that an individual was responsible for a portion of a company’s sales tax and withholding tax liabilities.  The Commission reasoned that the evidence established that the individual maintained the title of president of the company, retained check-writing authority and participated on the board of directors.  As such the Commission found the individual to be a “responsible” person.


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