Weekly Update for 2/24: Oregon Legislature Approves Tax Break for Facebook; Tennessee and Virginia Legislation on “Amazon” Laws; Washington Privatization of Liquor Sales; Summary Judgment for Online Travel Companies in Tennessee…and more.

 by Jennifer Weidler

KENTUCKY

U.S. Supreme Court Denies Petitions for Writ of Certiorari in Kentucky Tax Lien Case

The United States Supreme Court denied a petition for writ of certiorari in a Kentucky case dealing with general tax liens.  The Kentucky Supreme Courtpreviouslyheld that professional lenders with actual or constructive knowledge of an earlier recorded general tax lien are precluded from benefiting from an equitable reordering of the liens.  Since the U.S. Supreme Court denied certiorari, the Kentucky Supreme Court’s decision will stand.

 

NEW JERSEY

New Jersey Tax Court Dismisses Property Tax Assessment for Failure to Respond to Tax Assessor’s Financial Information Request

The New Jersey Tax Court has dismissed a property tax appeal, holding that the owner did not show good cause for its failure to respond to the tax assessor’s financial information requests.  The owner did not dispute actual receipt of the request for the financial information and there was no evidence that it found the request to be confusing or ambiguous.

 

OREGON

Oregon Legislature Approves Bill Aimed at Tax Break for Facebook

The Oregon Legislative Assembly approved a bill, SB 1532, which would ensure that data centers, such as those owned by Facebook, would not be taxed on their intangible assets.  The legislation comes after a dispute between Facebook and the Department of Revenue, in which the Department of Revenue determined that Facebook met the definition of a “communications company,” thereby allowing for it to be centrally assessed by the Department.   The legislation would clarify that a company operating a data center, such as Facebook’s, would not be centrally assessed if: (1) the property is part of an enterprise zone agreement, and (2) the data center represents more than 95 percent of its total property owned within the state.

 

TENNESSEE

Tennessee House Approves Legislation to Implement “Amazon” Law

The Tennessee House approved legislation, HB 2370, which would implement an agreement between the Tennessee Governor and Amazon.com regarding the collection of sales taxes in the state.  The legislation would grant Amazon.com an exemption from the collection of state sales tax through the sooner of January 1, 2014, or upon the passage of a federal law addressing the issue of remote sales.  For prior coverage of the legislation, click here.

 

U.S. District Court Issues Summary Judgment on Behalf of Online Travel Companies in Tennessee

The Nashville Division of the U.S. District Court for the Middle District of Tennessee issued summary judgment on behalf of online travel companies, who challenged a class action lawsuit, which was filed against them by the City of Goodlettesville.  The complaint alleged a failure to remit hotel occupancy taxes to the city.  The court found that the online travel companies did not purchase or take title to the hotel rooms and therefore did not fall within the statutory definitions applicable to the hotel tax.  Goodlettesville v. Priceline et al.,Dkt. No. 3:08-CV-00561 (U.S. Dist. Ct., Middle Dist. of Tennessee 2012).  A Pennsylvania court recently reached a similar holding with regard to the online travel company Expedia.  For more details, click here.

 

VIRGINIA

Virginia Approves Legislation to Phase-In Single-Sales-Factor Apportionment for Retailers

The Virginia General Assembly approved legislation, HB 154, which would phase-in mandatory single-sales-factor apportionment for retailers.  The legislation is slated to take effect on July 1, 2012.

 

Virginia Governor Reaches Agreement with Legislators on Amazon Legislation

Virginia’s Governor announced that he had reached an agreement with legislators regarding the Tax Fairness, SB 597, which would have required Amazon.com to collect sales taxes if it builds fulfillment centers in the state.  An amendment was added to the bill, and approved by the House of Delegates’ Finance Committee, authorizing the state to require an out-of-state seller with distribution centers in the state to collect state sales tax on in-state purchases on the earlier or September 1, 2013 or the effective date of federal legislation addressing the issue of remote sales.  For past coverage of the legislation, click here.

 

WASHINGTON

Washington DOR Issues Updates on Privatization of Spirits Sales

The Washington Department of Revenue has dedicated a portion of its website to guidance relating to the privatization of spirits sales in the state.  The links include updated Frequently Asked Questions as well as specific guidance on Initiative 1183, which requires the state to close state liquor stores on May 31, 2012, thereby allowing for the privatization of spirits sales.

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