Around Aprio

State & Local Tax news

Nov/Dec 2018

In This Issue:


Welcome to the November/December 2018 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 Supreme Court opinion that limiting a resident’s credit for taxes paid to another state is unconstitutional, paving the way for potential refund opportunities in many states, (ii) an Arkansas legal opinion explaining that “pre-sales” of a product as part of a crowdfunding campaign are subject to sales tax, and if the seller does not know where the purchaser is located, the sales could all be subject to Arkansas sales tax, (iii) a Utah Supreme Court case limiting the state’s authority to adjust related-party payment if the transactions are at arm’s length as determined under federal transfer pricing principles, and (iv) a Washington tax determination concluding under market-based sourcing, an ATM processor’s service revenue is sourced based on the location of the ATM machine and not the billing address of its customer.

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

Louisiana Supreme Court Declares Unconstitutional the Credit Limitation for Out-of-State Taxes Paid

By Jeff Glickman, SALT Partner

A potential refund opportunity exists for individuals who do not get a full credit against their resident state taxes for income taxes paid to other states, according to this Louisiana Supreme Court case.


Arkansas Determines that Sales Tax is Due on Crowdfunding Campaign Sales

By Jess Johannesen, SALT Manager

Crowdfunding campaigns are a great way to raise money for a new product idea, but they can also give rise to unexpected sales tax exposure if not planned for properly.

Utah Supreme Court Upholds Taxpayer’s Transfer Pricing in Related-Party Transaction

By Jeff Weinkle, SALT Senior Manager

States may have the authority to adjust related-party payments, but only after determining that the transactions are not at arm's length under federal transfer pricing principles.


Arizona Court Holds That Service Revenue is Included in Property Rental Business Tax Base

By Alissa Graffius, SALT Senior Associate

Arizona's Transaction Privilege Tax is like a sales tax in some ways but not others, which can result in unexpected liabilities if the unique rules are not fully understood.


Washington Finds that ATM Processor’s Service Revenue Sourced to ATM Location for B&O Tax

By Alissa Graffius, SALT Senior Associate

For apportionment purposes, applying market-based sourcing rules to service revenues is complicated because it is based on the facts and circumstances of each transaction.


Utah Rules That Contractor’s Purchase of Freeway Signage Subject to Sales Tax

By Tina M. Chunn, SALT Senior Manager

For real property contractors, one of the most difficult issues to analyze is if tangible personal property used in the project becomes real property, which ultimately determines each party's sales tax compliance obligations.


Ohio Supreme Court Rules That Resale Exemption Applies to Purchase of Promotional Items

By Jess Johannesen, SALT Manager

Although promotional items purchased and given away for free are typically not eligible for a resale exemption, there may be limited situations where the resale exemption is applicable.


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.