Welcome to the March 2020 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) the potential impact of COVID-19 on state and local taxes; (ii) a Florida technical assistance advisement that is one example of how some states are narrowly interpreting their cost of performance sourcing rules for service revenue in a manner that creates a market-based sourcing result; (iii) a California ruling holding that a purchaser of restaurant assets is a business successor, and therefore is liable for the sales tax liabilities of the seller; and (iv) an Ohio decision upholding the taxpayer’s position that certain gross receipts from financial transactions should be excluded from the Commercial Activity Tax base.

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, J.D., LL.M.

Partner-in-Charge, State & Local Tax Practice

COVID-19: State and Local Tax Implications

By Jeff Glickman, SALT Partner

The COVID-19 pandemic is affecting businesses and taxpayers in all facets of their operations and lives, and state and local taxes are no exception.  This article summarizes some of the state and local tax issues that may impact taxpayers.   

Florida Applies “Income Producing Activity” Rule to Source Service Revenue to Customer Location

By Kristen Davis, SALT Associate

The cost of performance rule for sourcing service revenue when calculating the sales factor of the apportionment formula generally assigns service revenue to the state(s) where the services are performed, but a number of states are narrowly interpreting those rules to create a market-based sourcing result.

California Imposed Successor Liability on Purchaser of Restaurant Assets

By Betsy Tuck, SALT Senior Manager

When acquiring the assets of a business, be careful how the transaction is structured or you may be deemed to be a business successor that is liable for the predecessor’s sales taxes.

Ohio Finds that Auto Finance Company’s Receipts are Not “Gross Receipts” Under the Commercial Activity Tax

By Jess Johannesen, SALT Manager

Ohio’s gross receipts-based Commercial Activity Tax (CAT) excludes from the tax certain categories of receipts, including those from certain financial transactions, so it is important for taxpayers to be aware of the nature of their transactions in order to not overpay their CAT liabilities.

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.