Category Archives: Controversies – State

Erroneous Sales Tax Collections in North Carolina

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Technocom Business Systems Inc. v. North Carolina Dep’t of Revenue; No. COA11-655 (NCAPP 2/21/2012). Taxpayer sold and leased equipment. It also serviced the equipment sold and leased and charged customers for the maintenance service. It also bought property to use in performing its service agreements. It did not pay use tax on the purchases of that property. A final determination was made that taxpayer owed use tax on its purchases of such property. Taxpayer also erroneously collected sales tax on the charges for its maintenance agreements, which were services and not taxable sales of property. [...]Read more

Voluntary and “Forced” Corporate Combinations in North Carolina

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Earlier this year the General Assembly made significant changes in the statutes authorizing forced combinations of multistate corporate groups for income tax filing. The DOR has been scrambling to figure out how to enforce the old law and the new law, as reflected in three notices it has issued, discussed below, as well as a revised voluntary disclosure program discussed below. The changes offer significant promise for corporate taxpayers. Undated 2011 Notice: The first notice stated that (a) the old forced combination statue, GS 105-130.6, would be applied in assessments proposed before New Year’s [...]Read more

State Taxes: Update on Amazon Laws and Cloud Computing

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Please click here for a recent paper by Atlanta SALT partners Jeff Glickman and Mike Petrik regarding two of the most significant issues in state tax during 2011: click-through nexus provisions (or “Amazon laws”) and the taxation of cloud computing.

State Taxation of Digitally-Delivered Goods and Services

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Click here to read a chapter by SALT partner Mary Benton (with Art Rosen and Cass Vickers) that recently appeared in the materials for the 2011 NYU Institute on State and Local Taxation conference. The article discusses, inter alia, different states’ treatment of digital goods for sales tax purposes, as well as a number of issues related to the income tax treatment of digitally-delivered goods and services, including nexus, P.L. 86-272, and apportionment of receipts from the sale of digital goods and services. [...]Read more

The Use of Contract Auditors for Transfer Pricing Audits

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States have recently started to use third party contract auditors to conduct transfer pricing audits of taxpayers. Such audits have resulted in large assessments made pursuant to the states’ “discretionary authority.” This article, recently published by Kendall Houghton and Maryann Luongo in the IPT’s August 2011 Tax Report (see p. 15), discusses the use of third party contract auditors in the transfer pricing arena as well as some of the issues that arise during such audits.

COST Amicus Brief Filed in Delhaize

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Last week, Alston & Bird’s Jack Cummings served as local counsel to the Council On State Taxation (COST) in the preparation and filing of COST’s amicus brief urging the N.C. Supreme Court to review the Delhaize case. The case involved North Carolina’s forced combination of Delhaize and one of its affiliates. The argument portion of the brief can be viewed by clicking here. We will update this blog as soon as we learn whether the N.C. Supreme Court has decided to grant review in this case. [...]Read more

NC Tax Appeals to Change

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Senate Bill 781. The procedural change is part of a major overhaul of North Carolina administrative law in a bill that the Governor vetoed. The General Assembly overrode the veto on July 25, 2011. Other parts of the bill make it harder for North Carolina to adopt regulations particularly under state and federal environmental laws and under the 2010 federal healthcare act, and in general. Administrative Law and the DOR. The General Statutes set up procedures for the adoption of administrative rules (called regulations at the federal level) and for contested cases involving agencies. Originally the [...]Read more