Posts by Kayla Harris
Arizona Court Holds That Service Revenue is Included in Property Rental Business Tax Base
Arizona’s Transaction Privilege Tax is like a sales tax in some ways but not others, which can result in unexpected liabilities if the unique rules are not fully understood. While states typically impose many of the same taxes, there are some nuances that can give rise to unexpected exposure if not fully understood. Arizona’s Transaction…
Read MoreWashington Finds that ATM Processor’s Service Revenue Sourced to ATM Location for B&O Tax
For apportionment purposes, applying market-based souring rules to service revenues is complicated because it is based on the facts and circumstances of each transaction. Over the past several years, many states have moved from the cost-of-performance method of apportioning service revenues to the market-based approach. A number of those states have provided specific guidance on…
Read MoreUtah Rules That Contractor’s Purchase of Freeway Signage Subject to Sales Tax
For real property contractors, one of the most difficult issues to analyze is if tangible personal property used in the project becomes real property, which ultimately determines each party’s sales tax compliance obligations. By Tina M. Chunn, SALT Senior Manager In most states, real property contractors are considered the end-users of the tangible personal property (“TPP”)…
Read MoreOhio Supreme Court Rules That Resale Exemption Applies to Purchase of Promotional Items
Although promotional items purchased and given away for free are typically not eligible for a resale exemption, there may be limited situations where the resale exemption is applicable. By Jess Johannesen, SALT Manager In our June 2017 SALT Newsletter, we detailed an Ohio Board of Tax Appeals (“BTA”) decision in which the BTA upheld a use…
Read MoreUtah Supreme Court Upholds Taxpayer’s Transfer Pricing in Related-Party Transaction
States may have the authority to adjust related-party payments, but only after determining that the transactions are not at arm’s length under federal transfer pricing principles. Transfer pricing issues don’t just arise in international transactions; they arise across state lines as well. Transfer pricing rules give taxing jurisdictions the ability to claw back transactions with…
Read MoreTexas Rules That Online Clothing Retailer Has Physical Presence Nexus
Even after Wayfair, physical presence can still create nexus, and taxpayers that own property that is temporarily located in a state can establish sales tax nexus, as explained in this Texas private letter ruling. By Tina M. Chunn, SALT senior manager Every day, entrepreneurs are finding new ways to provide goods and services to the market…
Read MoreState Tax Considerations for Virtual Currency Transactions and Initial Coin Offerings
Virtual currency transactions and initial coin offerings are growing rapidly, and guidance is needed to address the many state tax issues that arise from these transactions. By Jeff Glickman, SALT Partner It’s been about four and a half years since the Internal Revenue Service (“IRS”) issued guidance that virtual currency would be treated as property and…
Read MoreMinnesota Tax Court Denies Sales Tax Exemption for Purchase of Capital Equipment
When interpreting sales tax exemptions with ambiguous language, courts generally construe the language narrowly, as was the case in this Minnesota Tax Court decision addressing a sales tax exemption for certain capital equipment purchases. It is not uncommon for a state to provide dozens of exemptions from sales tax, some of which are broad (e.g.,…
Read MoreOregon Rules That Owner is Not Required to Combine Income of Multiple Pass-Through Entities
The Oregon Tax Court ruled that the state could not require a resident individual owner of multiple pass-through entities to report the combined income of all of those entities, since combined reporting is authorized for C-corporations only. In order to capture the complete activity of a business operated by multiple related legal entities, many states…
Read MoreNew Jersey Enacts Marketplace Facilitator Sales Tax Collection Requirement
States aren’t just enacting rules establishing nexus for remote sellers, they are establishing nexus rules for marketplace facilitators to collect and remit sales tax on behalf of remote sellers. By Jess Johannesen, SALT Manager Since the United State Supreme Court decision in South Dakota v. Wayfair, there has been a flurry of state activity enacting sales…
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