Gross Receipts Taxes Face Policy and Legal Challenges
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Vultures Circling as Bill to Expand California FCA to Tax Looms in Legislature
Legislators in Sacramento are mulling over one of the most (if not the most) troubling state and local tax bills of the past decade. AB 1270, introduced earlier this year and passed by the Assembly in late May, would amend the California False Claims Act (CFCA) to remove the “tax bar,” a prohibition that exists in the federal False Claims Act and the vast majority of states with similar laws.
If enacted, this bill…
An Uneven Playing Field: Judicial Deference to State Tax Administrator Interpretations
Judicial deference to state tax agencies puts taxpayers at a steep disadvantage and wastes time and resources on costly tax disputes. A united advocacy effort can help promote passage of state-level legislation that takes the tax administrator’s thumb off the scales of justice in administrative and judicial review of tax determinations.
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Learn more here about the Deference Coalition and how McDermott can help.…
California Bill Would Remove Tax Bar to False Claims Act
California legislators have recently introduced a bill, AB 1270, that would amend the False Claims Act (Act) to strike the tax bar. As introduced, the bill would amend the existing false claims statute in the state of California to expressly authorize tax-related false claims actions against a person whose reported taxable income, net income, or sales totaled $500,000 or more in to which the claim pertained, and the damages pleaded in the action total…
QHTC You Later: DC Bids Farewell to Historic QHTC Certification Process
The District of Columbia (DC) Office of Tax & Revenue (OTR) implemented sweeping changes to the Qualified High Technology Company (QHTC) certification process this year. As you may remember, beginning last year, OTR implemented a new online QHTC self-certification process for companies to obtain exempt purchase certificates. This year, OTR is expanding the scope of this online self-certification requirement to all QHTC benefits—including exempt sales as a QHTC and other non-sales tax benefits available to…
Delaware Starts Unclaimed Property “Compliance Reviews” (Different from Audits)
If the Delaware Office of Unclaimed Property believes that a person may have filed an “inaccurate, incomplete, or false report,” the State Escheator may authorize a “compliance review” under Del. Code Ann. tit. 12, § 1170(b). This is not a standard audit and as a result, the target is not entitled to the option of entering the state’s voluntary disclosure program rather than being subject to the audit. Nevertheless, the compliance review can result in…
Court Strikes Down New York Opioid Surcharge on Manufacturers and Distributers
On December 19, 2018, the US District Court for the Southern District of New York ruled in favor of McDermott’s client, the Healthcare Distribution Alliance (HDA), the trade association for pharmaceutical distributors. In Healthcare Distribution Alliance v. Zucker, the court granted summary judgment and enjoined enforcement of the New York Opioid Stewardship Act, which imposed a $600 million surcharge on manufacturers and distributors of opioid pharmaceutical products. The first $100 million installment was due on…
Hearing Scheduled for DC False Claims Expansion – Taxpayers Beware!
DC Council Chairman Phil Mendelson recently announced that a public hearing will take place later this month before the Committee of the Whole to consider a bill (The False Claims Amendment Act of 2017, B22-0166) that would allow tax-related false claims against large taxpayers. The hearing will begin at 9:30 am on Thursday, December 20, 2018, in Room 412 of the John A. Wilson Building. More details on the hearing and opportunity to…
STAR Partnership and State Responses to GILTI
While the state treatment of global intangible low-taxed income (GILTI) was on the mind of many taxpayers, most state legislatures that enacted legislation in 2018 focused on the state treatment of foreign earnings deemed repatriated under IRC § 965, leaving the state treatment of GILTI unclear in many states. That said, of the states that enacted legislation addressing GILTI, very few have decided to tax a material portion of GILTI.
In states that did not…
2018 Recap: State Responses to the Repatriation Transition Tax in the Tax Cuts and Jobs Act
