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IN THIS ISSUE

Welcome to the November/December 2016 issue of the HA&W State & Local Tax (SALT) Newsletter.

Welcome to the November/December 2016 issue of the HA&W 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 includes articles addressing (i) the U.S. Supreme Court’s denial of an appeal over Colorado’s use tax reporting law, (ii) potential refund opportunities in Mississippi and Alabama, (iii) the Ohio Supreme Court’s opinion upholding factor presence nexus provisions, (iv) who the Arizona retailer is in online transactions and (v) a Washington tax determination on the tax impact of bundled transactions and the significance of invoicing methods.

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 HA&W's SALT Practice, please email us at [email protected]. Thank you.

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

UPDATE: U.S. Supreme Court Refuses to Hear Colorado Use Tax Reporting Case

On Dec. 12, 2016, the U.S. Supreme Court ended almost five years of litigation over Colorado’s use tax reporting law by declining to review the Tenth Circuit’s opinion. 

Ohio

Ohio Supreme Court Upholds the Factor Presence Nexus Rules for the Commercial Activity Tax

By Jeff Weinkle, SALT manager

The Ohio Supreme Court has determined that a physical presence is not a necessary condition to levy a business privilege tax.

Mississippi Rules that Denial of Deduction for Dividends Received from Out-of-State Subsidiaries is Unconstitutional

By Jeff Glickman, SALT partner

The Mississippi Supreme Court finds that the state’s denial of a dividend received deduction discriminated against interstate commerce, opening the door to refund opportunities.

Lady justice

New York Issues Advisory Opinion Pertaining to Personal Exclusion for Taxable Information Services

By Tina Chunn, SALT senior manager

A recent New York Advisory Opinion examines whether certain information services qualify as exempt from sales and use tax.

Online market

Arizona Explains Who Is Responsible for Tax Collection for Online Marketplace Transactions

By Alissa Graffius, SALT senior associate

An Arizona tax ruling states that an online marketplace is responsible for the state’s Transaction Privilege Tax if it provides certain services to third-party merchants and has control over fulfillment.

Tax

Alabama Tax Tribunal: Regulation Limiting Credit for Tax Paid to Other States Invalid

By Jeff Weinkle, SALT manager

Alabama residents who paid taxes to other states and whose credits were limited by the invalid regulation may have a refund opportunity going back to 2013.

Biz Growth

Washington: Taxpayer Must Charge Sales Tax on Entire Charge for Taxable and Non-Taxable Services

By Jess Johannesen, SALT manager

A recent Washington tax determination illustrates the impact invoicing can have on the taxability of products and services.

capital gains

Nebraska Refuses to Apply Sham Transaction to Deny Special Capital Gains Exclusion

By Jeff Glickman, SALT partner

Nebraska ruled that a taxpayer’s transactions to meet the requirements of a special capital gains exclusion were legal.

court ruling

Colorado Rules that Foreign Company Had Nexus Due to Consignment

By Alissa Graffius, SALT senior associate

Foreign companies that structure their U.S. business to avoid creating a permanent establishment in the U.S. may still be subject to state sales and use tax.

About HA&W's State & Local Tax Practice

HA&W's State & 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 & 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.

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