Keep up with the latest state and local tax developments by reading our SALT Alerts. They are labeled by state so that you can easily find the ones that apply to you. The following are the most recent alerts:
Multistate Tax Commission establishes special voluntary disclosure initiative for online marketplace sellers
The Multistate Tax Commission, through its National Nexus Program, will offer a special voluntary disclosure initiative for certain online marketplace sellers that have inventory in a fulfillment center or warehouse operated by a marketplace provider in nineteen participating states.
Cook County, Illinois Board of Commissioners repeals soda tax
On Oct. 11, 2017, the Cook County, Illinois, Board of Commissioners voted to repeal, effective Dec. 1, 2017, the Cook County Sweetened Beverage Tax Ordinance.
Illinois Appellate Court holds online cosmetics retailer lacked use tax nexus
In a case filed under the Illinois False Claims Act, the Illinois Appellate Court recently held that an online cosmetics retailer did not have a duty to collect and remit use tax because it did not have substantial nexus with the state under the Commerce Clause of the U.S. Constitution.
Maryland Tax Court narrowly defines ‘solicitation’ for protected personal property
The Maryland Tax Court recently found that an out-of-state corporate taxpayer’s Maryland activities exceeded the solicitation of orders for tangible personal property protected under Public Law (P.L.) 86-272. In finding these activities sufficient to subject the entity to income tax, the Court concluded that when considered together, the activities were comparable to an in-state Maryland sales force rather than an out-of-state solicitation effort.
Maryland Tax Court finds out-of-state subsidiary lacked economic substance separate from Maryland-based parent
The Maryland Tax Court recently upheld the assessment of state corporate income tax on interest income received by an out-of-state subsidiary from its Maryland-based parent because the subsidiary lacked economic substance separate and apart from its parent. In its decision, the Court also upheld the Maryland Comptroller’s use of the parent company’s apportionment factor to determine the Maryland income of the subsidiary. The Court’s holding is notable for its consistency with a series of Maryland court cases that rely on the economic substance test to establish a finding of nexus.
New Mississippi regulation requires out-of-state sellers to collect sales and use tax
Mississippi recently adopted a regulation requiring certain out-of-state retailers to collect tax on sales made in Mississippi, despite a lack of physical presence. The regulation appears to contradict the U.S. Supreme Court’s conclusion in Quill Corp. v. North Dakota, a decision based on the Commerce Clause of the U.S. Constitution requiring out-of-state retailers to have physical presence in a state before a state can require the retailer to collect and remit sales and use tax.
New Jersey Tax Court finds out-of-state corporate limited partner has nexus for CBT purposes
On Oct. 4, 2017, the New Jersey Tax Court ruled that an out-of-state corporate limited partner had nexus with New Jersey for Corporation Business Tax purposes by virtue of its interests in two partnerships doing business in New Jersey. Specifically, the court found that there was no credible basis to determine that the taxpayer played a distinctly separate role as a passive investor in the partnerships.
New Mexico finds interest on payment-in-kind notes is non-business income
The Chief Hearing Officer of the New Mexico Administrative Hearings Office recently granted a taxpayer’s motion for summary judgment and held that interest income on payment-in-kind notes.
New York Tax Appeals Tribunal -- insurance premiums paid to a captive insurance company are not deductible
The New York State Tax Appeals Tribunal recently held that a taxpayer parent corporation could not reduce its New York entire net income by amounts it paid as premiums to its wholly-owned, captive insurance subsidiary.
Pennsylvania letter ruling declares information retrieval subject to sales tax
Recently, the Pennsylvania Department of Revenue issued Letter Ruling SUT-17-002, concluding that sales of information retrieval products accessed electronically are subject to Pennsylvania sales and use tax as sales of tangible personal property.
Wisconsin enacts budget bill with numerous tax provisions
On Sept. 21, 2017, Wisconsin Gov. Scott Walker signed into law Assembly Bill 64 as 2017 Wisconsin Act 59, which amends various corporate income tax, sales and use tax and personal income tax statutes, and modifies the state’s property tax laws. Included in the budget are provisions updating the state’s conformity to the Internal Revenue Code and revising net operating loss and broadcaster apportionment provisions.