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State & Local Tax news

February 2017

In This Issue:


Welcome to the February 2017 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 includes articles addressing (i) a taxpayer victory against the $800 California LLC fee, (ii) the loss of Utah NOLs following a merger, (iii) Indiana's sales tax treatment of cloud-based webcasting services, (iv) a Massachusetts case classifying a biotechnology company as a manufacturer for income tax apportionment purposes and (v) Georgia's sales tax treatment of non-itemized lease payments.

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 Thank you.

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

California Court of Appeals Confirms Passive LLC Members are Not Liable for Minimum Franchise Tax

By Jeff Weinkle, SALT manager

A California court determines that passive investors are not "actively engaged" and thus are not doing business in California for franchise tax purposes.


Utah Rules that Taxpayer Lost Net Operating Loss Carryover Following Merger

By Jess Johannesen, SALT manager

A recent Utah case stated that if an acquired company is merged out of existence, its NOLs cannot be deducted by the surviving entity.

Indiana Rules that Cloud-Based Solution for Webcasting is Not Taxable

By Alissa Graffius, SALT senior associate

Indiana decided that the taxpayer's business was a non-taxable service, instead of a taxable software product.


Massachusetts Classifies Biotech Company as Manufacturer Requiring Single Sales Factor Apportionment

By Tina Chunn, SALT senior manager

State income apportionment methods sometimes vary by industry, and a recent case highlights the importance of industry classification.


Georgia Ruling Addresses Sales Tax Treatment of Non-Itemized Lease Payments

By Jeff Glickman, SALT partner

The fees itemized or not itemized on an invoice to a customer can impact the sales tax a business must collect and remit.


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.