State and Local Thinking -- July 2015

State and local Thinking July 2015State and Local Thinking

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Oregon Tax Court finds gain from stock sale properly treated as apportionable business income
The Oregon Tax Court recently ruled that the gain from the sale of stock in an unrelated business by a non-Oregon corporation met the functional test to qualify as business income and was properly subject to Oregon corporation excise (income) tax as apportionable income. Read the SALT Alert.

Chicago Department of Finance addresses sales taxation of cloud computing transactions
The Chicago Department of Finance issued two rulings on June 9 that expand the city’s ability to tax cloud-based products and services. Read the SALT Alert.

Maryland provides taxpayer guidance in response to U.S. Supreme Court decision in Wynne
In response to the recent decision by the U.S. Supreme Court in Wynne, the state of Maryland has enacted corrective legislation allowing a credit for Maryland residents against county personal income tax for income taxed by other states. Read the SALT Alert.

Connecticut enacts sweeping tax reform including mandatory unitary reporting requirement
Connecticut Gov. Dan Malloy on June 30 signed two bills enacting budget legislation that includes mandatory unitary combined reporting for tax years beginning on or after Jan. 1, 2016.  Read the SALT Alert.

New Mexico enacts legislation allowing single sales factor election for corporate headquarters, amending credits and deductions
New Mexico Gov. Susana Martinez on June 15 approved a tax package that was passed during a brief special legislative session. The legislation includes a new single sales factor apportionment election for corporations that have a headquarters in the state and combines existing tax credits into an R&D credit related to new technology jobs and research. Read the SALT Alert.

Kansas enacts tax legislation including sales tax increase and tax amnesty program
Kansas has enacted legislation that includes tax increases and adjustments to address an anticipated $400 million budget deficit. Specifically, the legislation increases the state sales tax rate and amends various individual income tax provisions such as the inclusion of guaranteed payments for certain pass-through entities, tax rate changes, modification or elimination of itemized deductions and the exclusion of low-income filers from state income taxation. Read the SALT Alert.

New York Tribunal determines Article 9-A taxpayers are unitary and allowed to file franchise tax return on combined basis
The New York State Tax Appeals Tribunal determined that certain members of a taxpayer group were permitted to file Article 9-A corporate franchise returns on a combined basis, in part because they met the unitary business requirement. Read the SALT Alert.

Texas retroactively eliminates sales tax trailing nexus for out-of-state sellers
The Texas comptroller recently adopted a change to its administrative rule dealing with the nexus requirements for sales tax permit registration and tax collection responsibilities of out-of-state sellers. Read the SALT Alert.

Minnesota Tax Court denies use of Multistate Tax Compact’s equally weighted 3-factor apportionment formula election
The Minnesota Tax Court granted the Minnesota Commissioner of Revenue’s motion for summary judgment and denied a taxpayer’s election to use the equally weighted three-factor apportionment formula provided in the Multistate Tax Compact. Read the SALT Alert.

Texas cost of goods sold developments
The last several months have seen abundant developments in the treatment of the cost of goods sold deduction for purposes of the revised Texas franchise tax. Read the SALT Alert.

Texas governor signs 25% franchise tax rate cut into law
On June 15, Texas Gov. Greg Abbott signed legislation that will permanently reduce the revised Texas franchise tax rates by 25%. As a result, beginning with 2016 reports (generally based on business done during federal income tax periods ending in 2015), the tax rate will be reduced from 1% to 0.75% for businesses other than retailers and wholesalers. Read the SALT Alert.

Alabama enacts new job creation and investment tax credits and incentives
Alabama Gov. Robert Bentley has signed the Alabama Jobs Act, which provides a jobs-creation credit that may be taken against utility taxes, and a capital investment credit that may be taken against income taxes, financial institution excise taxes, insurance premium taxes or utility taxes. Read the SALT Alert.

Louisiana enacts income and franchise tax changes  
Louisiana Gov. Bobby Jindal signed several bills on June 19 amending significant income and franchise tax provisions that are generally effective July 1, 2015.  Read the SALT Alert.

Thought leadership from our State and Local Tax professionals

  • July 13: Bloomberg BNA, "Will the Marketplace Fairness Act 2015 ( or Its Rivals) Modernize U.S. Sales Tax Law?" written by Joel Waterfield, SALT managing director, and Guinevere S.M. Seaward Shore, SALT senior associate.
  • July 6, State Tax Today, "MTC Transfer Pricing Program Could Be Easy Source of Revenue, Practitioner Says," Jeremy Jester, SALT senior manager, quoted from his speech at Institute for Practitioners in Taxation conference.
  • July 2, State Tax Today, "Practitioners Say State Tax Credits Are Dying, but Incentives Are Thriving," Steve Carter, SALT managing director, quoted from his speech at Institute for Practitioners in Taxation conference.

Tax professionals

Meet David Rohlmeier, SALT partner in Dallas
David Rohlmeier is a SALT partner in the Dallas office and is responsible for consulting with clients on state and local tax matters.

David has more than 26 years of tax experience working with public and private clients in industries including hospitality, manufacturing, oil and gas, retail, services, construction and technology. He has consulted on state tax audits, sales tax refunds, nexus issues and other state tax matters.

David was a vice president of state and local tax with HJH Consulting in Dallas, Texas. He worked for two years as a senior tax analyst at Koch Industries in Wichita, Kan., and for nine years as an auditor and supervisor for the Texas comptroller of public accounts in the Dallas and San Antonio offices.  

David earned a BBA from the College of Santa Fe in New Mexico.


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