Tennessee

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.

28 State Tax Developments You May Want to Know - Sept 12, 2017

The following are state tax and business developments I have curated since September 5th, and posted in the LEVERAGE SALT LinkedIn group:

  1. State income tax return extended due dates 2016 calendar year

  2. While Virginia Supreme Court Holds “Subject-To-Tax” Means “Actually Taxed,” Determination of “Actually Taxed” is Relatively Broad for Purposes of Addback Exception

  3. Corporate Income Tax Rates around the World, 2017

  4. Wrapping Up August – and Looking Forward to September

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

  6. The Virginia Tax Amnesty Program will run for a 62-day period, beginning on September 13, 2017, and ending on November 14, 2017.

  7. Guidance for 2017 Tennessee Hall Income Tax Released

  8. As Political Division Grows, State Budgets Come in Later (If at All)

  9. How Did America's Richest State Become Such a Fiscal Mess?

  10. Indiana Ruling Holds that Taxpayer Successfully Showed Nexus with Foreign Jurisdictions for Sales Factor Throwback Purposes

  11. New York ALJ Rules in Favor of Taxpayer - Receipts from Online Services Sourced Out-of-State

  12. New York State Department of Taxation and Finance Removes Draft Proposed Regulation Section 4-2.12 Regarding Receipts from Certain Services to Investment Companies

  13. South Carolina Appellate Court Affirms that Satellite TV Provider Must Source Subscription Receipts Based on Market because Signal Delivery is Income-Producing Activity

  14. New York Advisory Opinion Explains Taxation and Sourcing of Interactive Software with Customized Skinning

  15. New New York Law Extends Certain Real Property Transfer Tax Rate Reductions to 1 September 2020

  16. California FTB proposes new withholding regulation for pass-through entities

  17. This week's local policy digest includes the NC Brunch Bill, a housing discrimination ordinance, and a balloon ban.

  18. California partnership returns: penalty relief available for 2016 returns and revised extension period in 2017

  19. NFL Superstars Sacked by Jock Taxes on Away Games

  20. State Revenue Volatility: An Inevitable Challenge With a Workable Solution

  21. States vs. Marketplace vs. Third-Party Sellers––The Amazon Sales Tax Challenge

  22. First U.S. Prosecution Over ‘Zapper’ Software Nets Guilty Plea

  23. New York Tax Office Loses Another Case Against Remote Company

  24. South Carolina income producing activity at customer location

  25. NORTH CAROLINA IMPORTANT NOTICE: SALES TAX BASE EXPANSION PROTECTION ACT

  26. TENNESSEE: Is there more than one formula for apportioning franchise and excise tax?

  27. TENNESSEE: 2017 SALES AND USE TAX GUIDE

  28. Virginia Supreme Court Rules in Addback Case

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.

30 State Tax & Business Developments You May Want to Know - August 2, 2017

The following are state tax and business developments I have curated since July 27th, and posted in the LEVERAGE SALT LinkedIn group:

  1. If you are not using checklists, what are you waiting for?

  2. New York Petitioner asks whether its "Cloud Collaboration Service" is subject to sales tax and whether it owes any sales or use tax on its purchase of hardware and software.

  3. YOUR SOURCE FOR ILLINOIS INCOME TAX GENERAL INFORMATION LETTER RULINGS

  4. YOUR SOURCE FOR ILLINOIS SALES TAX GENERAL INFORMATION LETTER RULINGS

  5. YOUR SOURCE FOR TENNESSEE TAX RULINGS

  6. Comments on Today’s Joint Statement on Tax Reform

  7. Testimony: The Role of Congress in State Taxation

  8. Hawaii Hikes Income Taxes to Pay for Earned Income Credit

  9. Governor Signed 2017–2019 Washington State Operating Budget and Compromise Legislation

  10. MTC Nexus Committee Considering Voluntary Disclosure Proposal for Online Sellers with Inventory

  11. New Hampshire Releases Reference Guide for Changes to Business Profits Tax and Business Enterprise Tax

  12. DC Emergency Legislation Codifies Unincorporated Business & Franchise Tax Rate Reductions

  13. Subcommittee within House Judiciary Committee Discusses Proposed Legislation that Would Codify a Physical Presence Nexus Standard

  14. Colorado DOR Issues Proposed Amended Remote Seller Notice and Reporting Regulation

  15. Virginia Department of Taxation Rulings Reflect New Law Requiring Remote Sellers with In-State Inventory to Register and Collect Tax on In-State Sales

  16. New Hampshire DOR Administration Holds Proposed Merger Involving LLCs is Not Exempt from Transfer Tax

  17. Washington DOR Explains How Credit Card Processors Measure Gross Income from Processing Credit Card Transactions for Business and Occupation Tax Purposes

  18. California FTB Issues Guidance on Eligibility for OSTC when Filing a Composite Return in a Reverse Credit State

  19. Director’s Update on Nexus Law Developments since December 13, 2016

  20. Nexus Program Director’s Update on Significant Nexus Law Developments Since March 9, 2017

  21. Consideration and possible action on Report (including draft agreement form) from closed session teleconference meetings held on April 18, May 16, June 20, and July 18, 2017 regarding time-limited vol

  22. National Nexus Program (NNP) Director’s Report for FY 2017

  23. Implications of Federal Partnership Audit Rules for State and Local Taxation

  24. SALT Alert! 2017-14: Washington State: Sales and Use Tax Economic Nexus/Use Tax Notice Bill Enacted

  25. California: Additional Guidance on California Competes Tax Credit and Market-Based Sourcing

  26. INDIVIDUAL INCOME TAX INSIGHTS: DOMICILE IS IN THE DETAILS

  27. CORPORATE CLOSE-UP: FEDERAL TAX REFORM PROPOSALS MAKE STATES LOOK IN THE MIRROR

  28. Unfair Apportionment: Consider the Alternatives

  29. Procedural State Tax Issues: Part I Finding the Best Forum

  30. Procedural State Tax Issues: Part II Coordinating Multistate Litigation

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.

46 State Tax & Business Developments You May Want to Know - July 21, 2017

This week I started curating state tax and business developments from a variety of sources into one spot, the LEVERAGE SALT LinkedIn group. Many people have contacted me and said they find it very useful. So I will continue to do so by posting a state tax update blog post every week. To clarify, I will post state tax and business developments daily to the LEVERAGE SALT LinkedIn group. Every week (maybe more than once a week) I will write a blog post summarizing those developments that I posted to the LEVERAGE SALT LinkedIn group with links to the posts. 

The following are state tax and business developments I have curated since July 18th, and posted in the LEVERAGE SALT LinkedIn group:

  1. Internet Access Exempt from Washington Sales Tax

  2. Washington B&O Tax Extends to Speculative Builders

  3. Do you owe TN sales tax on cloud-based software?

  4. Will federal tax reform make state tax nexus even more important?

  5. The ImpACT of the Tennessee IMPROVE Act

  6. Summary of Illinois Income Tax and Sales Tax Changes from P.A. 100-0022

  7. Illinois Withholding Tax Rate and Personal Exemption Amount Changes

  8. Illinois Income Tax Increase Guidance - Detailed Instructions For Filing Your 2016 Illinois Income Tax Return and 2017 Estimated Payments

  9. Incentives Watch: ‘Back to School, Back to School’ in Georgia—Scholarship Tax Credits Have Been Ruled Legal, Too

  10. Indiana – Gain from subsidiary sale is nonbusiness income; interest expense allowed for payments accrued but not paid

  11. FREE WEBINAR TODAY: Legislative and Taxation Updates in Communications and Cloud Industries

  12. Advancing Your Investment Opportunity through NMTC, HTC, and Traditional Incentives

  13. What Did the Washington State Legislature Do to Us This Time?

  14. Personal Property Tax Audits and Appeals – Coast to Coast

  15. 2017 Louisiana Legislative Session Recap

  16. Conferences: Not Lobbying Free-for-alls

  17. Hawaii Revises Government Ethics Laws

  18. State Rundown 7/19: Handful of States Still Have Their Hands Full with Tax and Budget Debates

  19. States in crisis: Embroiled in the worst budget battles since the Great Recession

  20. America's Top States for Business 2017: The full list

  21. On the move: Biggest winners and losers in states' battle to lure corporations, jobs

  22. Middle-Market Public Policy Roundup

  23. The National Center for the Middle Market’s Q2 ‘17 Middle Market Indicator

  24. Starbucks, Anthem Awarded Slice of $7M in Nevada Tax Relief

  25. Investment Entities Owning Property Purchased Outside the United States Face Double Taxation Under Amended New York Law

  26. DuPont Mostly Prevails in $800K Indiana Income Tax Case

  27. The Impact of Federal Tax Changes on States

  28. Unfair Apportionment: Consider the Alternatives | Tax Executive

  29. Kentucky:Amazon Delivers $1.5-Billion Package to Kentucky | Site Selection Magazine

  30. California: Innovation Works | Site Selection Magazine

  31. Indiana: Indiana Claims Factory Belt Title | Site Selection Magazine

  32. Iowa: How to Make $3 Billion | Site Selection Magazine

  33. Iowa: A Complete Business Cycle | Site Selection Magazine

  34. Manufacturing Innovation Center To Open in ’17 | Site Selection Magazine

  35. Minnesota: North Star Manufacturers ‘Optimistic’ | Site Selection Magazine

  36. New England: Punching Above Their Weight | Site Selection Magazine

  37. Tennessee Grants and Tax Credits

  38. Seattle City Council Passed Legislation Imposing a 2.25% Income Tax on Select Residents

  39. How High Are Individual Income Tax Collections in Your State?

  40. Potential state tax consequences of federal corporate tax reform | Deloitte US

  41. The DC qualified high-technology company program: Recent developments

  42. California Chief Counsel Ruling on the Application of Market-Based Sourcing Rules to Non-Marketing Services

  43. Michigan Department of Treasury Discusses Implications of Concluded Multistate Tax Compact Election Litigation

  44. Texas Comptroller Discusses Policy Changes Regarding Temporary Credit for Business Loss Carryforwards

  45. Connecticut Department of Revenue Services Apparently Enforcing Economic Nexus Standard on Some Remote Sellers

  46. Georgia Department of Revenue Amends Administrative Rule on Manufacturing Exemption

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 issue. You can make it as granular as you prefer. Clients hire LS to curate information for multiple specific items on a daily basis. This service is provided on a subscription basis.

Manufacturers May Elect Single-Sales Factor Apportionment in Tennessee

HB 0534 was signed by the Governor on April 26, 2017 which allows manufacturers in Tennessee to elect to use a single-sales factor apportionment method. The election provides:

For franchise tax and excise tax purposes, a taxpayer whose principal business in Tennessee is manufacturing may elect to apportion net worth and net earnings to Tennessee by multiplying such values by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the tax year and the denominator of which is the total receipts of the taxpayer from any location within or outside of Tennessee during the tax year. A Tennessee taxpayer’s principal business is manufacturing if more than 50 percent of the revenue derived from its activities in Tennessee is from fabricating or processing tangible personal property for resale and consumption off the premises.

The new election is effective for tax years beginning on or after Jan. 1, 2017.

TN Notice #17-11 - Single Sales Factor for Manufacturers

It has been reported that the election is "worth about $113 million for an estimated 518 Tennessee companies."

STATE TAX LETTER RULINGS, OBTAINING CLARITY PART 1: THE PROCESS IN TENNESSEE

In our quest for clarity in the maze of continual multistate tax challenges and developments, we search our tax research databases, we contact colleagues, and yet, sometimes, we still don't know what to do. One option is to get a "letter ruling" or "private letter ruling." 

I want to provide you with information on each state's letter ruling process. Then we will explore 'how' to write a letter ruling.

Note: "When" to write a letter ruling is a judgment call based on the facts surrounding your case, and the specific state's process and other rulings the state has issued. 

I plan on writing about each state's letter ruling process in future blog posts. Today, I am focusing on Tennessee's letter ruling process since I recently moved to Tennessee. 

According to Tennessee law, a letter ruling is an interpretation and application of the tax law as it relates to a specific set of facts furnished to the Department by the taxpayer. Assuming the facts are correctly represented by the taxpayer requesting the letter ruling, the Department is bound to follow its decision with respect to that taxpayer. The taxpayer’s identity must be disclosed to the Department in its letter ruling request.

Revenue rulings are statements regarding the substantive application of law and statements of procedure that affect the rights and duties of taxpayers and other members of the public. Revenue rulings are advisory in nature and are not legally binding on the Department. The taxpayer’s identity is not required for a nonbinding revenue ruling.

When exceptional circumstances require immediate consideration of an issue, a taxpayer can request an expedited letter ruling or revenue ruling by expressly making such request in writing and submitting an expedited ruling fee of $10,000 with the request. When an expedited ruling is requested, the Commissioner of Revenue will either issue a ruling within sixty days from the date of the request or deny the request and return the fee to the requesting party within seven days from the date of the request.

Fees

The fee for the issuance of a letter ruling or revenue ruling is $500.
The fee for the issuance of an expedited ruling is $10,000.

To request a ruling, the taxpayer (or the taxpayer’s representative) should send a letter to the Commissioner of Revenue, 500 Deaderick Street, Nashville, TN 37242.

The letter should include the following:

  • The taxpayer’s (or representative’s) contact information, including mailing address and telephone number;
  • A check for the applicable fee;
  • A fully completed Power of Attorney, if required (see below);
  • The taxpayer’s question or questions;
  • A description of all relevant facts;
  • A copy of any pertinent sample invoices, contracts or the like (which may be provided in redacted form); and
  • If appropriate, pictures of the equipment, products, or other items that are the subject of the ruling request.
  • The letter may also include the taxpayer’s analysis of the law; however, this is not required.

Power of Attorney

The Department places extremely high importance on maintaining taxpayer confidentiality. In many cases, the taxpayer requesting a letter ruling wishes for the Department to communicate with its outside representative, such as a CPA or attorney. In such instances, the taxpayer must sign a Power of Attorney, which is available on the Department's website.

The Power of Attorney must list all outside representatives with whom the Department is permitted to communicate about the letter ruling request. A Power of Attorney is not required if the only people with whom the Department will communicate are the individual taxpayer, or the owners and employees of the taxpayer company.

The Process: From Request to Issued Ruling

Each ruling request is assigned to a Department attorney when received. The attorney will contact the taxpayer (or representative) to request any additional necessary information and to clarify any questions the attorney may have. The attorney works closely with the Department's General Counsel to research and prepare a preliminary draft of the ruling. When completed, the preliminary draft is sent to various divisions within the Department for review. The attorney may further revise the draft ruling, based upon comments received from the reviewers. Once the review and revision process is complete, the final version of the ruling is sent to the Commissioner's office. At least one Deputy Commissioner reviews the ruling before it is given to the Commissioner. In appropriate cases, the Commissioner will meet with the Deputy Commissioners and the Department's legal staff to discuss the ruling. After thorough consideration, the Commissioner will issue the ruling to the taxpayer.

Rulings on the Department of Revenue's Website

It is the policy of the Department that all letter rulings and revenue rulings that are instructive to other taxpayers, and that are not detrimental to the State’s Economic Development efforts, will be made available to the general public on the Department's Web site. All rulings will be redacted to remove identifying taxpayer information before being made public. The taxpayer will have the opportunity to review and comment on the proposed redacted version before it is made public. The Department will consider requests that rulings not be published based on a taxpayer's belief that confidentially cannot be accomplished in a redacted version of the ruling. Any request for non-publication, even in redacted form, should be made in the ruling request and must include a detailed explanation as to why the ruling should not be made public.

Duplicative Ruling Requests

If a tax ruling has been previously issued on a specific topic, the Department is not likely to issue another ruling on the same topic unless the taxpayer can show that its facts are materially different from the facts that serve as the basis for the issued ruling, or that there has been a substantive change in the law. If a taxpayer submits a ruling request that is duplicative of previously issued guidance, the Department will likely respond by informal letter and provide a copy of the applicable previously issued tax ruling, in addition to returning the taxpayer's ruling fee.

Revocation of a ruling

Rulings may be revoked or modified by the Commissioner at any time. The revocation or modification of a letter ruling will be effective retroactively unless the following conditions are met, in which case the revocation will be prospective only:

  • The taxpayer must not have misstated or omitted material facts involved in the transaction;
  • Facts that develop later must not be materially different from the facts upon which the ruling was based;
  • The applicable law must not have been changed or amended;
  • The ruling must have been issued originally with respect to a prospective or proposed transaction; and
  • The taxpayer directly involved must have acted in good faith in relying upon the ruling and a retroactive revocation of the ruling must inure to his detriment.

Statutory Authority Tenn. Code Ann. Section 67-1-109 gives the Commissioner the power to issue revenue and letter rulings at his discretion.