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State and Local Thinking -- January 2015

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State and local Thinking January 2015State and Local Thinking
SALT Alerts
SALT Alerts are available via Twitter.

Massachusetts Appellate Tax Board upholds use tax on common carrier trucks domiciled in state
The Massachusetts Appellate Tax Board recently upheld the imposition of use tax on vehicles that were used by a freight business headquartered in Massachusetts, but were titled and registered outside the state. Specifically, the board found that the tax did not violate the Commerce Clause of the U.S. Constitution. Read the SALT Alert.

Michigan enacts sales and use tax click-through nexus and affiliate nexus provisions
On Jan. 15, Michigan Gov. Rick Snyder approved legislation that implements click-through nexus and affiliate nexus provisions for purposes of the state’s sales and use tax. Read the SALT Alert.

Georgia Tax Tribunal allows deduction for income subject to revised Texas franchise tax

The Georgia Tax Tribunal has held that a Georgia resident taxpayer was entitled to deduct pass-through income that was subject to the Revised Texas Franchise Tax (RTFT) in computing his Georgia taxable income. Read the SALT Alert.

South Carolina Supreme Court holds party proposing alternative apportionment method has burden of proof
The South Carolina Supreme Court has held that a party proposing the use of an alternative apportionment method must prove by a preponderance of the evidence that (i) the statutory formula does not fairly represent the taxpayer’s business activity in the state and (ii) its alternative method is reasonable. Read the SALT Alert.

Michigan Court of Claims upholds legislation retroactively repealing Multistate Tax Compact

The `Michigan Court of Claims has upheld the validity of legislation that retroactively repeals the Michigan statutes adopting the Multistate Tax Compact effective Jan. 1, 2008. Read the SALT Alert.

Kentucky Court of Appeals holds telecommunications tax is unconstitutional

The Kentucky Court of Appeals has held that the state’s telecommunications tax is unconstitutional because it prohibits local governments from collecting telecommunications franchise fees. Read the SALT Alert.

Ohio enacts municipal income tax reform

Concluding a process that spanned several years, Ohio Gov. John Kasich signed legislation on Dec. 19 reforming Ohio’s municipal income tax system, which is required to be adopted by all municipalities levying an income tax on and after Jan. 1, 2016. The legislation provides for a uniform tax base and other definitions, adopts a uniform five-year net operating loss carryforward for both corporations and individuals to be phased in over a six-year period, and limits the ability of municipalities and tax administrators to adopt conflicting rules. Read the SALT Alert.

California court holds nonmanagerial interest in LLC did not constitute doing business in state

The California Superior Court granted an out-of-state corporation’s motion for summary judgment and determined that the corporation’s ownership interest in a manager-managed limited liability company did not constitute doing business in the state for purposes of the corporation franchise tax. Read the SALT Alert.

SALT top stories of 2014
Finally, after much anticipation, tax reform has become reality this year in several high-profile jurisdictions including New York, the District of Columbia and Rhode Island. The significant changes implemented by these “blue states” include modifications that follow the general trend toward single sales factor apportionment and market-based sourcing for sales of other than tangible personal property. New York is the prime example of a state enacting major tax reform legislation, but other states enacted or evaluated significant tax reform during 2014, and other states are certain to consider tax reform measures during 2015. Read the SALT Alert.

Tax webcasts and events
Enhanced exemption certificate management tools for tax automation clients
Thursday, Feb. 12, 2:30 p.m. ET
Register for the webcast.

Tax changes to the maquiladora industry
Wednesday, Feb. 18, 3 p.m. ET
Register for the webcast.

Replay past state and local tax webcasts

The following webcasts are available for replay:
"Golden Parachute Payments: Preparing for M&A"

Corporations planning for a merger or acquisition have an extensive list of issues to address, and golden parachute payments must be among them. Harsh tax consequences may be imposed, resulting in a 20% excise tax on executives and a loss of deduction for the corporation. This webcast will help you understand the fundamental parachute payment rules and explore some of the more complex issues. More importantly, you will understand strategies to avoid the tax consequences associated with excess parachute payments.

"Significant 2014 SALT Developments and Predictions for 2015"
After much anticipation, New York, the District of Columbia and Rhode Island adopted significant state and local tax (SALT) reforms in 2014 that touched on all aspects of the corporate income tax calculation. In addition, several provisions in the Multistate Tax Compact continued to be the focus of multistate litigation, and the Multistate Tax Commission recommended revisions to the Compact to its member states. During this webcast, members of Grant Thornton's SALT - National Tax Office discussed the significant SALT developments from 2014 and SALT trends taxpayers may see in 2015. Replay the webcast.

Thought leadership from our State and Local Tax professionals

Grant Thornton publications

SALT outlook, trends and predictions for 2015
This article focuses on how Grant Thornton thought 2014 would unfold from a SALT perspective, how these predictions lined up with reality and which critical SALT issues may come to the fore this year.

Publications
  • Jan. 26, BNA Snapshot, "Elections May Give States Pause About Both Major Tax Cuts and Hikes," SALT Principal Jamie Yesnowitz quoted.
  • Jan. 6, State Tax Today, "Council Expected to Finalize Market-Based Sourcing Legislation," Jamie Yesnowitz quoted.
  • Dec. 23, Bloomberg BNA Daily Tax Report, "Limits on State Taxing Authority Take Center Stage in Supreme Court," SALT Director Chuck Jones quoted.

Tax professionals

Meet Kevin Herzberg, leader of the Florida Market Territory
Kevin Herzberg is a partner in the Florida Market Territory's Tax Services and State and Local Tax practices, and leader of the Central Florida Tax Practice. He has more than 25 years of broad-based state tax experience, including tax planning, Sarbanes-Oxley Section 404 review, Accounting Standards Codification (ASC) 740 and 450 tax accounting, M&As, ruling requests, tax controversy and tax compliance.

Prior to joining Grant Thornton LLP, Kevin served as tax practice leader, managing director and Florida state tax practice leader at regional and international accounting firms. He also acted as a resource for technical state-based issues, and as the sales tax and property tax leader. He has deep technical nationwide experience in sales and use tax and Florida property tax. Kevin has strong experience in the manufacturing, distribution, retail, transportation, hospitality and health care industries.

Kevin earned a BS in accounting from Northern Illinois University and an MBA from the University of South Florida.


Tax professional standards statement
This document supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the subject of this document, we encourage you to contact us or an independent tax adviser to discuss the potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this document may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this document is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.