Another Wynne for Taxpayers: Unconstitutional Limitations on Credits for Taxes Paid to Other States

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Clark Calhoun explores the implications of a decision from the U.S. Supreme Court in an article published in IPT Insider. (See p. 10 of the linked document.) In Comptroller of the Treasury of Maryland v. Wynne, the U.S. Supreme Court declared Maryland’s income tax credit scheme unconstitutional, holding that the state’s failure to provide a full credit for the state and local taxes paid to other states was internally inconsistent and, therefore, violated the dormant Commerce Clause. Calhoun's article focuses on a similar tax credit issue, the constitutionality of which seems highly suspect [...]Read more

International Tax Advisory: Treasury Issues Final & Temporary Section 385 Regulations

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Our International Tax Group explores the final debt-equity regulations under Section 385, highlighting significant modifications to the rules proposed last April. While the regulations remain controversial, the final version brings a number of taxpayer-friendly changes, including a reduction in scope and general delay in application.

Alston & Bird’s full International Tax advisory can be found here: www.alston.com/advisories/section-385-regulations 

California Updates Unclaimed Property Law to Recognize Electronic Recurring Bank Account Activity

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On September 22, California Governor Jerry Brown signed AB 2258 into law, which revises California’s Unclaimed Property Law (UPL) to expressly recognize that certain electronic recurring transactions constitute “owner-generated activity” that would prevent accounts held by a banking or financial organization from being considered presumed abandoned.  As described by the bill’s author, AB 2258 effectuates a “simple modernization of the statute,” which will “eliminate unnecessary escheatment notices to be sent from the bank to the account holder that require the account holder to affirm [...]Read more

Colorado Asks the Supreme Court to Overturn Quill

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On August 29, the Direct Marketing Association (DMA) submitted a certiorari petition to the U.S. Supreme Court asking the Court to review the Tenth Circuit Court of Appeals’ decision in Direct Marketing Association v. Brohl (Brohl II). The case already made one trip to the Supreme Court (Brohl I), in which the Court held that the Tax Injunction Act did not bar federal-court review of the case. On remand, the Tenth Circuit held that Colorado’s use tax reporting regime did not violate the Commerce Clause. (To refresh: Colorado’s regime requires out-of-state sellers to report sales to Colorado [...]Read more

International Tax Advisory: Back to School: Recent Cases Offer Lessons in International Tax “Basics”

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Our International Tax Group offers a refresher course on U.S. residency start dates and double taxation with U.S. territories.

Click here to read the full advisory.

When Taxpayers Should Not Bear the Burden of Proof

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The impact of the burden of proof on state tax appeals cannot be overstated.  Taxpayers often lose tax appeals on the basis that they failed to satisfy the seemingly elusive burden of proof. Apart from limited instances in the arena of alternative apportionment, taxpayers bear the burden of proof in nearly every state tax appeal.  As the reasoning goes, taxpayers should bear the burden of proof because it is the taxpayers that possess the necessary information and, thus, are in the best position to establish the proper amount of state tax liability.  But should this always be the case? In [...]Read more

Plains All American Case Dismissed – Federal Court Determines Holder Must Develop Factual Record Before Challenging Kelmar Unclaimed Property Audit

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On August 16, 2016, the U.S. District Court for the District of Delaware granted Kelmar’s and Delaware’s motions to dismiss in Plains All American Pipeline, L.P., v. Cook, et al.[1]  The court determined that the Plaintiff (1) lacked standing to sue Kelmar, (2) had not demonstrated ripeness of declaratory relief against Delaware for any of its claims, except equal protection, and (3) failed to state a cause of action regarding its equal protection claim. Background In 2014, Delaware, through its third-party auditor, Kelmar, initiated an unclaimed property audit of Plains All American [...]Read more