State and Local Thinking -- July 2016

State and local Thinking - July 2016SALT Alerts Texas Supreme Court rules school finance system is constitutional
The Texas Supreme Court decided on May 13 the most recent constitutional challenge to the Texas school finance system by rejecting the plaintiffs’ and intervenors’ claims and reversing the District Court’s decision that had found elements of the system to be unconstitutional. Read the SALT Alert.

California announces fiscal year 2016-17 budget for California Competes Tax Credit
The governor’s Office of Business and Economic Development On June 29 announced the California Competes Tax Credit annual budget and application periods for the 2016-17 fiscal year.  Read the SALT Alert.

Florida Supreme Court upholds constitutionality of sales tax origin-sourcing for florists
The Florida Supreme Court has upheld the constitutionality of a Florida sales tax statute that requires florists to source transactions based on the location of the seller rather than the location of the purchaser. Read the SALT Alert.

Nevada Tax Commission issues final regulations on new commerce tax
The Nevada Tax Commission has adopted final regulations on the administration, calculation and payment of the state’s new commerce tax. The regulations took effect June 28 and are notable for their detailed guidance on the situsing of gross revenue of a business entity to Nevada. Read the SALT Alert.

Oregon gross receipts tax will be considered by voters in November
On June 6, the Oregon secretary of state qualified Initiative Petition (IP) 28, entitled A Better Oregon VI, for placement on the Nov. 8, 2016, Oregon general election ballot. If IP 28 is approved by voters, C corporations with Oregon sales of more than $25 million would be subject to a minimum tax of $30,001 plus 2.5% of the excess over $25 million. C corporations currently pay a minimum tax based on Oregon sales, but that tax is capped at $100,000. Read the SALT Alert.

Alabama tax amnesty program is available until Aug. 30, 2016

Alabama is offering a tax amnesty program that began on June 30 and will be available until Aug. 30, 2016. If an amnesty application is approved during the amnesty period, the department will waive 50% of the interest and all penalties associated with the tax periods for which amnesty is applied. Read the SALT Alert.

Texas Supreme Court holds oil and gas exploration and production equipment subject to sales tax
The Texas Supreme Court has affirmed the Texas Third District Court of Appeals’ ruling that an oil and gas exploration and production company’s purchases of casing, tubing and downhole equipment didn't qualify for the manufacturing exemptions from Texas sales and use tax. Read the SALT Alert.

Louisiana enacts sales and use tax notice requirements on remote retailers
Louisiana Gov. John Bel Edwards signed legislation on June 17 that imposes notice requirements on remote retailers that don't collect and remit Louisiana sales and use tax on sales made in the state. Specifically, the legislation requires that remote retailers provide a notice to purchasers at the time of sale and an annual notice to each purchaser of the total purchases made during the immediately preceding calendar year. Read the SALT Alert.

Minnesota Tax Court approves inclusion of foreign disregarded entities in combined report
The Minnesota Tax Court granted a taxpayer’s motion for summary judgment on June 6 and held that the Minnesota Department of Revenue improperly adjusted the taxpayer’s Minnesota income to disallow income and apportionment factors from a foreign subsidiary that had elected to be disregarded for federal income tax purposes. Read the SALT Alert.

Minnesota Supreme Court denies use of Multistate Tax Compact’s equally weighted 3-factor apportionment election
The Minnesota Supreme Court on June 22 denied a taxpayer’s election to use the equally weighted three-factor apportionment formula provided by the Multistate Tax Compact. In affirming the Minnesota Tax Court, the Minnesota Supreme Court held that the state’s enactment of the Compact, specifically Articles III and IV, did not create a contractual obligation that prohibited the state from later repealing these provisions without withdrawing completely from the Compact. Read the SALT Alert.

Arizona updates conformity to federal provisions, establishes tax recovery program for 2016
Arizona Gov. Doug Ducey signed legislation conforming the state to the new federal partnership audit rules enacted under the Bipartisan Budget Act of 2015, making Arizona the first state to explicitly follow these federal rules. Read the SALT Alert.

Arkansas ALJ upholds director’s discretionary power to require alternative apportionment
An administrative law judge (ALJ) for the Arkansas Office of Hearings and Appeals recently held that the director of the Arkansas Department of Finance and Administration properly exercised his discretionary power to require a taxpayer to apply market-based sourcing to certain interstate sales of services to calculate its Arkansas corporation income tax apportionment factor rather than the statutory cost of performance method. Read the SALT Alert.

Thought leadership from our State and Local Tax professionals Publications

Tax professionals Meet Saylor Sims, managing director for Income/Franchise Tax in the Phoenix office
Saylor Sims is managing director for Income/Franchise Tax in Phoenix. He joined Grant Thornton as a senior tax manager in 2013, after having worked for more than 10 years for two Big 4 accounting firms and CliftonLarsonAllen.

Saylor provides corporate and individual clients with tax guidance and planning related to multistate and federal tax. He also regularly represents clients in the tax aspects of M&A and in federal and state audit matters.

Saylor has been a regular lecturer on tax topics, including multistate tax, partnerships, S corporations and C corporations.

He earned a JD degree from the University of South Carolina School of Law and a BS in accounting, with honors, from the University of South Carolina.

Tax professional standards statement
This content 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 topics presented herein, we encourage you to contact us or an independent tax professional to discuss their 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 content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content 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.