State and Local Thinking -- August 2015

State and local Thinking: August 2015SALT Alerts
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Oregon temporarily disallows use of credits to pay corporate minimum tax and amends tax haven provisions
Oregon Gov. Kate Brown signed legislation on July 20 that specifies that for tax years beginning on or after Jan. 1, 2015, and before Jan. 1, 2021, tax credits cannot be used to satisfy a corporate minimum tax liability. Read the SALT Alert.

Delaware fundamentally changes unclaimed property law, makes VDA permanent
Delaware Gov. Jack Markell signed legislation on July 22 that makes fundamental changes designed to improve the state’s unclaimed property law. Read the SALT Alert.

North Carolina lowers corporate income tax rate, now the lowest top corporate rate in the United States
North Carolina Gov. Pat McCrory announced on July 28 that the state had met the necessary revenue target for the fiscal year ended June 30, 2015, to lower the corporate income tax rate from 5% to 4% effective for tax years beginning on or after Jan. 1, 2016. Read the SALT Alert.

Ohio enacts budget including click-through nexus provisions
Ohio Gov. John Kasich signed budget legislation on June 30 that makes various changes to sales and use tax nexus standards, including the adoption of click-through nexus. Read the SALT Alert.

Washington enacts tax changes, including click-through nexus
Washington Gov. Jay Inslee signed a series of bills on July 1 resolving the Washington state budget. The legislation includes click-through nexus provisions, extends the existing economic nexus provisions to wholesalers with no physical presence in Washington for purposes of the state’s business and occupation (B&O) tax, and repeals the preferential B&O tax rate applied to royalty income. Read the SALT Alert.

Texas Appellate Court addresses potential application of COGS deduction to service providers and sellers of intangible property
The Texas Court of Appeals for the Third Appellate District recently reversed a trial court and held that a “rent to own” business whose majority of revenues comes from “rental purchase” agreements was entitled to the preferential 0.5% revised Texas franchise tax rate for the 2008 report year. Read the SALT Alert.

Massachusetts Appellate Tax Board holds parent company not required to add back related-party interest
The Massachusetts Appellate Tax Board held that a parent company qualified for an exception from the corporate excise tax requirement to add back related-party interest because the underlying debt was primarily entered into for a valid business purpose, was supported by economic substance and constituted bona fide debt, and the interest reflected fair value or consideration. Read the SALT Alert.

Puerto Rico enacts tax reform legislation phasing from sales tax to value-added tax
The Commonwealth of Puerto Rico has enacted the Tax Reform Process Act, which will phase the Puerto Rican indirect tax system from a sales and use tax to a value added tax. Read the SALT Alert.

Tax professionals
Meet  Trey Thee, SALT senior manager in the Tulsa, Okla., office
Trey Thee is a SALT senior manager who is based in the Tulsa, Okla., office and focuses on production severance tax.

He has more than 10 years of experience in the oil and gas industry, including in measurement, control and automation, revenue accounting, production severance tax reporting, severance tax and royalty audit, and reporting related to the Office of Natural Resources Revenue/Bureau of Land Management.

Trey earned an MBA from Oklahoma Wesleyan University and a BBA in Management Information Systems from the University of Oklahoma.

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