Category Archives: State and Local Planning

States Continue to Challenge Quill’s Physical Presence Standard

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When a client calls us to inquire about sales tax exposure, we instinctively start asking questions about people and possessions: “Do you have property in other states? Where do you have employees? Have you sent any sales representatives to any states where you have made sales?” For decades, tax practitioners have known that a proper sales tax nexus analysis begins with physical presence. It’s black-letter law, after all. States can’t levy sales tax on someone who isn’t there. We know this because of Quill Corp. v. North Dakota and National Bellas Hess v. Illinois before it. [...]Read more

State & Local Tax Advisory – Gillette Overturned: One Test, Two Decisions in California

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On Thursday, December 31, 2015, the Supreme Court of California issued its decision in Gillette Co. v. Franchise Tax Board, reversing the California Court of Appeal and holding that the Multistate Tax Compact is not a binding compact between its member states.  Accordingly, the California legislature had the authority to, and did in fact, replace the state’s equally weighted apportionment formula with a double-weighted-sales formula in 1993.  This highly anticipated decision by the California high court will undoubtedly have a significant impact on the landscape of ongoing disputes among taxpayers [...]Read more

State & Local Tax ADVISORY: Several Organizations Support Equifax’s Petition for Certiorari to the United States Supreme Court

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This advisory discusses amicus curiae briefs filed with the United States Supreme Court in support of the Petition for a Writ of Certiorari to the Supreme Court of Mississippi in the case of Equifax, Inc., et. al. v. Mississippi Department of Revenue. Joining Equifax in its attempt to overturn the Mississippi Supreme Court’s decision were the Institute for Professionals in Taxation (IPT), the Council on State Taxation (COST) (joined in its brief by the Mississippi Economic Council and Mississippi Manufacturers Association) and the Georgia Chamber of Commerce. The advisory is provided in [...]Read more

Federal Tax ADVISORY: Federal Tax Crimes

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Few taxpayers are aware of the operations of the Criminal Investigation Division of the IRS, and rightly so. Out of hundreds of millions of tax returns filed, only 3311 persons were convicted of tax crimes in the government’s FY 2013, according to the Report of the CI Division. Nevertheless, the small number masks the extreme seriousness of tax crimes to those involved.

The advisory is provided in PDF on the Alston & Bird website: www.alston.com/advisories/fed-tax-april-2014

SALT Advisory – Limiting State Anti-Limitations Provisions

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This article was originally published in State Tax Notes, as part of Alston & Bird’s regular column “Audit & Beyond.” See 66 State Tax Notes 417 (November 5, 2012). This advisory discusses how, in unclaimed property audits and in voluntary disclosures, states commonly take the position that time-based contractual limitations on an owner’s right to claim unclaimed property may be disregarded by the state and how that allows states to seize unclaimed property even if the owner no longer has a right to claim the property. States justify that position based on so-called anti-limitations [...]Read more

State and Local Tax Advisory – California Voters Approve Proposition 39, but Significant Questions Remain Regarding How Corporate Taxpayers Can Apportion Their Income

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This advisory discusses the recently approved Proposition 39, a California ballot initiative that requires corporations conducting a multistate business to apportion their income using a single-sales factor apportionment formula beginning January 1, 2013. Two other recent developments in California raise significant questions regarding the effectiveness of Proposition 39’s single-sales factor apportionment requirement. In Gillette Co. v. Franchise Tax Board, the Court of Appeal of California held that a corporate taxpayer could elect to apportion its income using either the statutory formula [...]Read more

Wealth Planning Alert: Taking Advantage of Tax Exemptions Before They May Expire on December 31, 2012

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Attached is a link to a recently prepared Wealth Planning Alert titled “Taking Advantage of Tax Exemptions Before They May Expire on December 31, 2012.” The 2010 federal estate and gift tax law provided good news for wealthy taxpayers: a lower maximum tax rate of 35%; estate, gift, and generation-skipping transfer tax exemptions of $5 million ($10 million for a married couple); and estate and gift tax “exemption portability,” which allows a surviving spouse to increase his or her own lifetime exemption by the exemption a predeceased spouse never used. However, these favorable [...]Read more

State & Local Tax Advisory – Importance of the Federal Preemption Doctrine for Unclaimed Property

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The attached article titled “Importance of the Federal Preemption Doctrine for Unclaimed Property” was written by Kendall Houghton and Matthew Hedstrom of Alston & Bird’s State and Local Tax Group. This article was originally published in State Tax Notes, as part of Alston & Bird’s regular column “Audit & Beyond.” See 64 State Tax Notes 857 (September 24, 2012). Audit & Beyond, a column on state tax audits, the resolution of disagreements between business taxpayers and state revenue departments, and emerging nationwide state tax trends, is written [...]Read more

State & Local Tax Advisory – Significant Development in New York: New York Supreme Court Strikes Down MTA Payroll Tax

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This advisory discusses the New York Supreme Court’s recent holding that the Metropolitan Commuter Transportation Mobility Tax (“MTA payroll tax”) was passed unconstitutionally and thus is invalid. This decision potentially impacts all companies with operations in the New York City area and its development should be closely monitored. The advisory is provided in PDF on the Alston & Bird website: http://www.alston.com/advisories/salt-advisory-mta-payroll-tax  [...]Read more

State & Local Tax Advisory: Gillette: Not Exactly a Close Shave – California Court of Appeal Approves Taxpayers’ Compact Elections, Leaving FTB in a Lather

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It was perhaps viewed as a close shave prior to the California Court of Appeal’s issuance of its opinion in Gillette Co. & Subsidiaries v. Franchise Tax Board, No. A130803 (Ct. App., July 24, 2012), but in fact, the court soundly rejected the California Franchise Tax Board’s (FTB) arguments that taxpayers were not entitled to make a so-called “Compact election” and file California tax returns using the Uniform Division of Income for Tax Purposes Act’s (UDITPA) equally-weighted, three-factor apportionment formula. This advisory explains how the court’s decision [...]Read more