Welcome to the October 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 potential refund opportunity for the California annual LLC tax, (ii) additional Wayfair activity, at both the state and local level, and regarding both sales tax and income tax economic nexus, (iii) a Texas Comptroller’s decision explaining the sales tax impact of a golf course tee time reservation app and a barter transaction between the technology provider and the golf course, (iv) a Utah administrative opinion discussing the impact of a federal election to include certain foreign subsidiaries in the consolidated group on the state’s water’s edge combined reporting method.

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

Please note that due to the holidays, our next issue will be a double issue for November/December 2019 and will be issued around mid-December.

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, J.D., LL.M.

Partner-in-Charge, State & Local Tax Practice

California Rules That Minority LLC Owner is Not Required to Pay the Annual LLC Tax

By Betsy Tuck, SALT Manager

Taxpayers have a potential California refund opportunity for the annual $800 LLC as the Office of Tax Appeals struck down the state's argument that prior case law established a bright line 0.2 percent ownership test for "doing business."

Wayfair and Nexus: The Aftermath, Part 7 – Thresholds, Timing and Local Taxes

By Kristen Davis, SALT Associate

States and localities continue to enact sales tax economic nexus rules, apply Wayfair to income tax, and provide guidance in a variety of areas, including what revenue counts toward the thresholds and procedures for registering after the thresholds are exceeded.

Texas Rules That Tee Time Reservation App Is a Taxable Data Processing Service

By Tina M. Chunn, Tax Senior Manager

A recent Texas decision ruled that the taxpayer’s tee time reservation app constituted taxable data processing services and that sales tax was due on the barter transaction with its golf course customers, highlighting the sales tax complications that can arise when a third party technology gets involved in transactions that were traditionally between a buyer and seller.

Utah Rules That Taxpayer May Exclude Foreign Income from Combined Water’s Edge Return

By Jeff Glickman, SALT Partner

The state income tax impact of a federal income tax election may be unclear and give rise to unintended negative state income tax consequences, as was the case in this Utah decision addressing the exclusion of certain consolidated members from the state’s combined return.

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.