CPE

are court case decisions worthless?

I attended the Paul J. Hartman State and Local Tax Forum this week. It was the 30th anniversary of the Forum. I’ve attended the conference over the years multiple times. Good conference. Knowledgeable, esteemed and respected speakers (lawyers). These lawyers handle some of the top state and local tax cases and litigation around the country. They also seem to be the same lawyers that speak at ALL of the conferences, so you’ve probably heard of them or met them.

As I was sitting in one of the sessions, the panel of speakers was going back and forth talking about court cases. One of the attorneys was explaining a specific case that the tax practitioner community was looking to as having broad applicability and authority to not only the state and taxpayer involved in the case, but every taxpayer and every state. He explained the facts and issues in the case and did confirm the ruling’s final decision and applicability, etc. However, he also said he disagreed with the ruling and mentioned the dissenting opinion. He thought the reasoning in the case was incorrect and thus, the conclusion was wrong and should be challenged.

Other speakers (attorneys) on the panel mentioned how the case was precedential and should be considered authoritative and reliable for taxpayers. The first attorney still disagreed with the conclusion and seemed to infer that taxpayers should not follow the court case.

That’s when it hit me, a strange epiphany - should taxpayers follow court case rulings?

Can taxpayers follow court case rulings? Yes, the facts matter. Yes, the states involved matter. But if a taxpayer’s facts line up with the facts in a ruling, shouldn’t the taxpayer be able to follow the case’s decision? Or should every taxpayer have to determine on their own, or make another judgement call regarding whether the case was decided correctly?

When does a taxpayer get a clear roadmap?

When does a taxpayer get certainty when the path always seems to be grey?

Taxpayers and state tax practitioners deal with vague statutes and regulations. State notices, publications, letter rulings, and court case decisions are supposed to provide clarity (which they generally do), but if taxpayers can’t follow court case decisions, then what good is a court case decision?

I know, I know, court case decisions are often appealed and I am not talking about those. I’m talking about court case decisions that are final (no appeal) and appear to be settled (until the next challenge). Can taxpayers rely on those decisions?

I also know that states often change their statutes or regulations after a court case if the state disagrees with the ruling or wants to limit its applicability (let’s not even talk about retroactive legislation - which I’ve done in the past).

Every question in the state tax profession is a research question due to the number of jurisdictions, the lack of uniformity and unique client fact patterns. The search to find answers and provide certainty is a daily challenge. If taxpayers and tax practitioners can’t rely on court case decisions, then what can we rely on?

State Tax Knowledge Update (37 items) - Sept 21, 2017

The following are state tax and business developments I have curated since September 12th, and posted in the LEVERAGE SALT LinkedIn group:

Some of the items may be on the same state/issue/topic, but they are from different sources which may give you a broader perspective to help your company or client.

  1. VA sourcing rules constitutional IPA where work performed

  2. AL group may use NOLs generated before consolidated election

  3. State Rundown 9/13: The Year of Unprecedented State Budget Impasses Continues

  4. Comments on South Dakota’s Challenge to Quill

  5. Domestic tax quarterly webcast series: a focus on state tax matters

  6. South Dakota Supreme Court – Sales tax economic nexus provisions unconstitutional; appeal to US Supreme Court expected

  7. Virginia Denies Alternative Market Approach for Sourcing Sales

  8. South Dakota Supreme Court Rules in Favor of Remote Retailers; Next Step US Supreme Court?

  9. Florida Provides Guidance Regarding Sourcing of Services for Income Tax Purposes

  10. Pennsylvania Department of Revenue Attempts to Tax Information Retrieval Services: An Overview of Letter Ruling SUT-17-002

  11. Foxconn Tax Credit Package Enacted in Wisconsin

  12. Zapper Fraud Case Results in Mandatory Real-Time Monitoring

  13. INDIVIDUAL INCOME INSIGHTS: CHECKING UP ON CHECKOFFS

  14. CORPORATE CLOSE-UP: VIRGINIA COURT DENIES CORPORATION USE OF ALTERNATIVE METHOD OF APPORTIONMENT

  15. PROPERTY TAX POST: ARE STATES TAKING THEIR TAKINGS POWER TOO FAR?

  16. CORPORATE CLOSE-UP: ILLINOIS (FINALLY!) FINALIZES MARKET-BASED SOURCING REGULATIONS

  17. INDIVIDUAL INCOME TAX INSIGHTS: INCOME TAX CONSEQUENCES OF NONRESIDENT TELECOMMUTING

  18. CORPORATE CLOSE-UP: THE FTB’S SMALL CAP SOLUTION TO ALLEGED FINANCIAL AND NON-FINANCIAL COMBINED REPORTING APPORTIONMENT DISTORTION

  19. CORPORATE CLOSE-UP: DELAWARE CONTINUES DEVELOPING UNCLAIMED PROPERTY RULES

  20. State Tax Filing Relief for Victims of Hurricanes Harvey and Irma

  21. Examining the Potential Tax Implications of Streaming Video Distribution

  22. Alabama Appellate Court Affirms that Certain Separate Company NOL Carryforwards Can Be Claimed on Consolidated Return

  23. New Delaware Law Includes Retroactive Tax Law Changes for Series Captive Insurance Companies

  24. Illinois Tax Tribunal Holds that Insurance Premium Financing Subs Must File as Part of Combined Return for Financial Organizations

  25. New Mississippi Law Allows Department of Revenue to Contract with Third-Party Auditors on a Contingent Fee Basis

  26. Proposed Regulations Reflect Recent Montana Law Changes that Expand Waiver of Composite Return or Withholding for Domestic Second-Tier Pass-Through Entities

  27. Pennsylvania Trial Court Finds NOL Cap is Unconstitutional

  28. Tennessee DOR Issues Chart and Examples Depicting Apportionment Calculations Under Various Elections

  29. Virginia Circuit Court Denies Alternative Apportionment Request and Upholds Validity of Standard Cost-of-Performance Method to Apportion Income from Subscription-Based Services

  30. Massachusetts DOR Finalizes New Regulation Adopting Bright Line Nexus for Some Remote Sellers

  31. Proposed Amended Ohio Rule Addresses Bad Debts, Assignment of Accounts Receivables, and Financing Companies

  32. Illinois DOR Proposes Use Tax Nexus Standards for Trade Show Retailers

  33. DON'T MISS the 24th Annual Paul J. Hartman SALT Forum

  34. 2017 Oregon Legislative Tax Update

  35. How Much Does Your State Collect in Corporate Income Taxes Per Capita?

  36. REMINDER: Supreme Court to Consider West Virginia Tax Credits Case

  37. Maine: 2017 Legislative Changes

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LEVERAGE SALT to daily curate state tax developments relating to a specific industry, state(s), tax type and issueYou can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.

29 State Tax & Business Developments You May Want to Know - August 21, 2017

The following are state tax and business developments I have curated since August 14th, and posted in the LEVERAGE SALT LinkedIn group:

  1. Resistance is not Always Futile: New Decision in Ongoing Delaware Unclaimed Property Audit Litigation

  2. MTC Voluntary Disclosure Initiative for Online Marketplace Sellers (i.e., Amazon FBA program)

  3. A State Tax Administrator's Perspective on Partnership Taxation

  4. Illinois Court Upholds Cook County’s Beverage Tax Finding It Passes Constitutional Muster and Related Developments

  5. Webinar: August 24th - Best Practices in Achieving Obsolescence Adjustments for Complex and Commercial Properties

  6. State Corporate Income Tax Rules for Sourcing of Revenue for Law Firms

  7. Nationwide Sales/Use Tax Update - September 12, 2017

  8. Credits Can No Longer Be Applied Against Oregon’s Minimum Tax

  9. Total Solar Eclipse Won’t Black Out State Taxes

  10. South Carolina going after Amazon (the marketplace facilitator) for not collecting sales tax on behalf of the businesses that use the marketplace to sell products to SC residents

  11. Summary of New York Corporation Tax Legislation Enacted after the 2016-2017 Budget

  12. New York Amendments Regarding Sales Tax Rules for Transactions between Certain Related Entities and for Purchases Made by Nonresident Businesses

  13. Technology Company State Tax Guide from Moss Adams (Very Nicely Done)

  14. Illinois Amends Rule Regarding Alternative Apportionment

  15. Amazon’s Marketplace Business Isn’t a Tax Avoidance Scheme

  16. A comparison of enterprise zone programs in Illinois, Indiana, and Wisconsin

  17. MTC National Nexus Program Adds 2 More Participating States to Online Marketplace Seller Voluntary Disclosure Initiative

  18. Rhode Island DOT Announces that it Will Accept Applications for Recently Enacted Amnesty Program Beginning December 1

  19. California FTB Issues Draft Proposed New Pass-Through Entity Withholding Regulation

  20. Minnesota Tax Court Holds that Taxpayer May Apply NOL Carryovers from an Acquired Entity to Full Extent Permitted under IRC § 382

  21. New North Carolina Law Includes Changes to Intercompany Expense Addback Statute, Added Franchise Tax Base Deduction, and Definition of Business Income

  22. Texas Court of Appeals Upholds Subcontractor Exclusion While Reversing and Remanding on Taxpayer COGS Methodology

  23. Memo Explains Recent New York Law Changes on Transactions Involving TPP Resold Between Certain Related Entities

  24. California Supreme Court Denies Rehearing in Recent Case Involving Taxation of a Transfer of Legal Entity Interests

  25. Washington DOR Reissues Emergency Amended B&O Tax Rule on Financial Institution Apportionment to Conform with MTC Changes

  26. Three Big Problems with Sales Taxes Today — and How to Fix Them

  27. Should Online Platforms Collect Sales Tax For Third-Party Sellers?

  28. The United States Of Unicorns: Every US Company Worth $1B+ In One Map

  29. Are Remote Retailers and Marketplace Providers in the 'Path of Totality'?

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LS to daily curate state tax developments relating to a specific industry, state(s), tax type and issueYou can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.

20 State Tax & Business Developments You May Want to Know - July 27, 2017

The following are state tax and business developments I have curated since July 25th, and posted in the LEVERAGE SALT LinkedIn group:

  1. UPCOMING WEBINAR: Indirect tax and the Internet of Things: Where could convergence impact your organization?

  2. New bill would stymie state taxation of online sales

  3. California Supreme Court Increases the Cost of M&A Deals in Expansive Real Estate Transfer Tax Decision

  4. Pa. Senate could revisit budget Wednesday

  5. Georgia Senators Reviewing Corporate, Personal Tax Breaks

  6. Is your firm filled with open-minded people?

  7. Vanilla. Tastes good, but it’s a bad way to market.

  8. Oregon Passes First-in-Nation Statewide "Predictive Scheduling" Law

  9. Key Property Tax Appeal Dates: July, August, and September Deadlines

  10. States Clear Path for Truck Platooning: First Step to Fully Autonomous Vehicles

  11. The Middle Market Reports Solid Growth in Q2 2017

  12. The New Age of Cyber Crime

  13. Circle of Outsiders

  14. 2017 WORLD'S MOST COMPETITIVE CITIES

  15. Texas - Economic Development Guide

  16. COST Issues Letter of Amicus Curiae in North Ardmore v. County of Los Angeles (Real Estate Transfer Tax

  17. THE STATE OF FEDERALISM TODAY

  18. State Legislatures Magazine - check out this site (interesting)

  19. State Rundown 7/27: State Legislative Debates Winding Down but Tax Talk Continues

  20. Trump Administration, Republican Congressional leaders release statement on tax reform goals

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LS to daily curate state tax developments relating to a specific industry, state(s), tax type and issueYou can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a subscription basis. Contact me at strahle@leveragesalt.com.

24 State Tax & Business Developments You May Want to Know - July 25, 2017

The following are state tax and business developments I have curated since July 21st, and posted in the LEVERAGE SALT LinkedIn group:

  1. Seattle Passes Municipal Income Tax; It is Almost Certainly Illegal

  2. State Inheritance and Estate Taxes: Rates, Economic Implications, and the Return of Interstate Competition

  3. Local Policy Digest

  4. NEW State and Local Taxation Certificate in the Graduate Tax Program at Villanova University!

  5. Colorado Will Require Use Tax Reporting Starting July 1 2017

  6. Register today for Georgetown Law's 2017 Advanced State and Local Tax Institute (July 27-28)

  7. Maine Enacts Economic Nexus Provisions for Sales Tax Purposes

  8. Commonwealth Court Rules in Favor of Taxpayer in Case Involving Scope of “Building Machinery and Equipment” Exemption

  9. Eversheds Sutherland SALT Scoreboard Publication - Second Quarter 2017

  10. WEEKLY ROUND-UP: MARIJUANA, OIL AND GAS, AND OTHER EXCISE TAX DEVELOPMENTS

  11. CORPORATE CLOSE-UP: MID-YEAR CRISIS? ILLINOIS RAISES ITS CORPORATE INCOME TAX

  12. Memo to Politicians: Bargaining for an Amazon Warehouse? Turn the Tables!

  13. House Judiciary Posts Witnesses for Digital Sales Tax Hearing

  14. Marvel Nabs $21M in California Tax Credits for ‘Captain Marvel’

  15. JULY 26 WEBINAR: REGISTER NOW for Q2 ‘17 Middle Market Indicator

  16. Private Equity Special Report: 10 young and thriving firms worth watching

  17. Comprehensive Tax Reform

  18. A Repatriation Tax on Foreign Income of US-Based Multinational Corporations

  19. Number of Approved State Tax Credits Expected to Double in 2017

  20. State expands research and development tax credits for machinery purchases

  21. Minimize State and Local Tax with Negotiated Credits & Incentives

  22. State and Local Tax Roundup: Retail and Consumer Industry

  23. UPDATE: The Delaware Secretary of State Releases the Final Version of its Estimation Regulations With No Substantive Changes

  24. The Court of Appeals of Iowa Rules An Out-of-State Intangible Holding Company Was Not Doing Business In Iowa

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LS to daily curate state tax developments relating to a specific industry, state(s), tax type and issueYou can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a subscription basis.

FREE WEBINAR TOMORROW: STRATEGIC PLANNING FOR STATE NOLS

I will be co-presenting a FREE Bloomberg BNA webinar tomorrow on state net operating losses. I hope you can make it! Sign up here.

Some of the questions we will attempt to answer are:

  • Is strategic planning for state net operating losses possible? 
  • Do we care about federal NOLs?
  • How are state NOLs determined and how can we plan?
  • How does group reporting change everything and how can we plan?
  • State IRC. Sec. 382 limitations - do they exist?
  • How will federal tax reform impact state NOLs?

We will also cover some crazy state NOL rules.

Please join me.