State and Local Thinking -- August 2016

State and local ThinkingSALT Alerts
Michigan Court of Appeals enforces mandate allowing IBM to make three-factor apportionment election
The Michigan Court of Appeals has held that the Michigan Court of Claims erred when it failed to issue an order granting summary disposition in favor of International Business Machines Corp.  Read the SALT Alert.

District of Columbia enacts budget revising combined reporting provisions, franchise tax return due dates
The District of Columbia has enacted legislation, the Fiscal Year 2017 Budget Support Emergency Act of 2016, which revises provisions governing combined reporting and franchise tax return filing dates. Read the SALT Alert.

North Carolina enacts significant tax legislation and proposes market-based sourcing provisions
North Carolina Governor Pat McCrory recently signed into law several different bills that significantly change the state’s corporation income and sales tax regimes. The corporate income tax provisions formally propose market-based sourcing concepts in the area of apportionment, reduce the allowable deduction for related party interest expense, and exclude certain receipts from financial transactions from the sales factor. Read the SALT Alert.

Arizona enacts credit modifications for business expansion and relocation
Arizona Gov. Doug Ducey recently signed legislation that modifies and expands two credits available to businesses expanding in or relocating to Arizona. The qualified facility tax credit has been extended through 2022, and the Data Center Tax Relief Program has been expanded.  Read the SALT Alert.

Louisiana enacts tax provisions, including market-based sourcing, during second special session
In an effort to close an estimated $600 million deficit in the FY 2017 budget, Louisiana Gov. John Bel Edwards called for the Louisiana legislature to hold a second special session during June 2016. Gov. Edwards signed the various bills from this most recent special session into law. Read the SALT Alert.

Tennessee issues regulations to clarify application of new market-based sourcing rules
The Tennessee Department of Revenue approved regulations on June 28 that clarify certain provisions of the 2015 Revenue Modernization Act. The new regulations address market-based sourcing rules for sales of items other than tangible personal property and the tax treatment of disregarded entities. Read the SALT Alert.

New York City Tax Appeals Tribunal affirms exclusion of mortgage subsidiary from combined city bank tax return
The New York City (NYC) Tax Appeals Tribunal affirmed the determination of the chief administrative law judge’s previous decision in In the Matter of Astoria Financial Corp. The tribunal held that a federal savings and loan association wasn't required to include its Connecticut subsidiary in its combined NYC banking corporation tax returns for the 2006-08 tax years. Read the SALT Alert.

U.S. District Court finds Delaware unclaimed property audit procedures unconstitutional
The U.S District Court for the District of Delaware determined on June 28 that Delaware’s unclaimed property audit procedures violated substantive due process. The court found that the technique used by Delaware to estimate a holder’s Delaware unclaimed property liability subjected the taxpayer to liability imposed by multiple jurisdictions. Read the SALT Alert.

District of Columbia Court of Appeals reverses summary judgment granted to oil companies in ‘Chainbridge’ litigation
The District of Columbia Court of Appeals held on June 30 that the Office of Administrative Hearings (OAH) abused its discretion in applying offensive nonmutual collateral estoppel against the District of Columbia Office of Tax and Revenue, and granting summary judgment to three oil company taxpayers. Read the SALT Alert.

Thought leadership from our State and Local Tax professionals Publications

  • Aug. 11: Bloomberg BNA Daily Tax Report, "Sweeping Tax Trends Across States Not Slowing Down," coverage of Grant Thornton "State and local tax midyear update" webcast.
  • Aug. 10: Bloomberg BNA Daily Tax Report, "GE, Corporations Not Always Enticed by States' Tax Overhaul," coverage of Grant Thornton "State and local tax midyear update" webcast.

Tax professionals Meet Rob Michaelis, SALT partner in the Boston office
Rob Michaelis is a SALT partner in the Boston office and leads the SALT practice for Grant Thornton’s New England Cluster. He has 20 years of tax experience.

Before joining Grant Thornton, Rob worked at PricewaterhouseCoopers, most recently as a director in the SALT practice. He also worked for more than three years at RSM, where he was a partner and the practice leader of the Great Lakes regional SALT practice.

Rob has experience in strategic tax planning and restructuring services, due diligence/transition review and state tax compliance services for corporations, S corporations and partnerships. His background includes income/franchise taxes, sales/use taxes, property taxes, state employment taxes and unclaimed property issues.

Rob earned a JD degree from DePaul University College of Law and a BS degree in Accountancy from Northern Illinois University.

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