State & Local Tax news

January 2019

In This Issue:


Welcome to the January 2019 issue of the Aprio State & Local Tax (SALT) Newsletter

With dozens of different taxes imposed by the 50 states (and thousands of local jurisdictions), we recognize how challenging it is to keep up with current issues and developments. This newsletter is designed to provide insights on developments in state and local taxes including new legislation, regulations, rulings and cases addressing issues such as corporate and personal income taxes, sales and use taxes, nexus, franchise/net worth taxes, etc.

This issue of the newsletter contains articles addressing (i) a Louisiana appellate court decision holding that Jefferson Parish was allowed to require Walmart.com to collect and remit local sales tax on sales made by third-party retailers on its marketplace website; (ii) an Iowa Supreme Court opinion concluding that Lowe’s may be liable for sales tax on its installation service under certain installation contracts, even though installation services generally are not subject to sales tax; (iii) a California Franchise Tax Board ruling that delivering goods to California customers in taxpayer-owned trucks did not violate P.L. 86-272’s income tax nexus protection rules; (iv) an Illinois private letter ruling explaining certain conditions pursuant to which the “signed written agreement” requirement will be met to exempt a software license from sales tax; and (v) Arkansas’ guidance regarding its new sales tax on specified digital products and how the development of advertising spots for radio, TV or social media may now be taxable.

In case you missed prior issues of this newsletter, please click here

If you have any comments, questions or suggestions regarding current or future topics, or if you would like to learn more about Aprio's SALT Practice, please email us at jeff.glickman@aprio.com. Thank you.

Jeff Glickman
Jeff Glickman, J.D., LL.M.
Partner-in-Charge, State & Local Tax Practice

Local Louisiana Jurisdiction Rules That Walmart.com is Required to Collect Sales Tax on Third-Party Sales

By Jess Johannesen, SALT Manager

In this Louisiana court decision, one local parish argued successfully that Walmart.com was responsible for collecting and remitting local sales tax on sales made by third-party retailers on its website, potentially exposing marketplace facilitators to a myriad of complex local sales tax compliance obligations.


Iowa Supreme Court Ruled That Lowe’s Installation Services May Be Taxable

By Alissa Graffius, SALT Senior Associate

Failure to properly analyze how a service may be classified for sales tax purposes can lead to unexpected liability as Lowe's found out in this Iowa Supreme Court opinion.


California Rules That Delivery of Goods in Taxpayer’s Trucks Satisfies P.L. 86-272 Nexus Protection

By Jeff Glickman, SALT Partner

A federal law limiting income tax nexus allows companies to engage in certain solicitation activities in a state without having to pay income tax, but only if the representatives engaging in such activities understand what activities are and are not permitted.

Illinois Provides Guidance on Computer Software Licensing Agreement Signature Requirement

By Tina Chunn, SALT Senior Manager

Illinois' state tax exemption for software licenses requires, among other things, that there be a signed written agreement between the vendor and the customer, which can be a difficult requirement to satisfy for downloadable software transactions.


Arkansas Considers Certain Audio Production Services a Taxable Digital Product

By Jeff Weinkle, SALT Senior Manager

Arkansas, like some other states, now taxes certain digital audio and/or digital products, and companies providing services in this industry may find themselves required to collect and remit sales tax for certain transactions.


About Aprio's State and Local Tax Practice

Aprio's State and Local Tax (SALT) practice advises clients on the state and local tax implications of their business operations, allowing clients to strategically minimize their liabilities and risks. Our team has over 50 years of combined SALT experience working in industry, state departments of revenue, public accounting and private law practice. We specialize in all areas of SALT, including matters related to state tax nexus, corporate and personal income taxes, sales/use tax, franchise/net worth taxes, credits and incentives, and mergers and acquisitions. In addition, we represent clients in administrative matters before state revenue departments around the country, including audit defense and settlement negotiations, pursuing voluntary disclosure agreements and obtaining letter rulings.