Category Archives: Tax Policy

Sales Tax Nexus Roundup – Introducing Louisiana and Tennessee

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We have been closely following the rapid rise of state laws and regulations imposing sales tax nexus or reporting requirements on out-of-state sellers with no physical presence in the state. In the wake of decisions by the U.S. Supreme Court and the U.S. Court of Appeals for the Tenth Circuit in cases brought by the Direct Marketing Association (see prior coverage), states have felt emboldened to enact provisions that challenge the Supreme Court's holding in Quill v. North Dakota, which demands that a seller have physical presence in a state before the state can require the seller to collect [...]Read more

Vermont Proposes Colorado-style Use Tax Reporting Law

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As we discussed in February, the Tenth Circuit upheld the constitutionality of Colorado’s use tax notification law with its decision in Direct Marketing Association v. Brohl (DMA II). In his concurrence to the decision, Judge Gorsuch predicted that “many (all?) states can be expected to follow Colorado’s lead and enact statutes like the one now before us.” (See Gorsuch, J., concurring, at 9). It appears that Vermont may be the first Colorado follower. Vermont is a seasoned player in the game of sales and use tax nexus and collection. In 2011, the state began requiring retailers who make [...]Read more

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

Déjà Vu All Over Again – The Recurring Saga of Expiring Tax Provisions

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If you go by what Yogi Berra says, tax policy and baseball have a lot in common.  Just as we head toward the end of the regular season of baseball and hope we make it to play-offs, Congress is doing the same.  Having returned from the August recess, they are looking ahead at what they need to do to finish strong.  As for déjà vu, the atmosphere surrounding expired tax provisions is markedly similar to what it was last year around this time.  Will the result be different this year?  Maybe.  Let’s take a look at the issues and what’s happened so far. Discussions of tax reform have [...]Read more