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New York State Governor Andrew Cuomo released his Fiscal Year 2020 budget and accompanying legislation on January 15, 2019 (the Budget Bill). Among other things, the Budget Bill proposes statutory revisions to respond to the Tax Cut and Jobs Act of 2017 (TCJA) and to impose a sales tax collection obligation on “marketplace providers.” Read the full legal alert here.
In a Technical Advice Memorandum issued on December 4, 2018, the California Franchise Tax Board (FTB) concluded that delivery of tangible personal property via private truck is a protected activity under P.L. 86-272. However, any activity that goes beyond the scope of delivery, such as backhauling, is not protected. The FTB explained that Congress, when it enacted P.L. 86-272 in 1959, chose not to limit P.L. 86-272 protection to shipments by common or contract carrier.…
The New York State Department of Taxation and Finance released guidance in the form of tax return instructions addressing how it will account for global intangible low-taxed income (referred to as GILTI) for apportionment purposes. These instructions allow a taxpayer to include its net GILTI amount (rather than the total receipts related to the generation of GILTI) in the denominator of its apportionment factor, but do not require a taxpayer to include any amount related…
On December 31, 2018, District of Columbia Mayor Muriel Bowser signed B22-1070, the Internet Sales Tax Emergency Amendment Act of 2018 (Emergency Act). As of January 1, 2019, the District of Columbia now subjects digital goods to the 6% sales tax rate and imposes Wayfair-style economic nexus sales tax collection requirements. As of April 1, 2019, the District also will require marketplace facilitators to collect sales tax on behalf of their marketplace sellers. Read the
The District provides a variety of tax benefits to QHTCs, including sales and use tax1 and personal property tax exemptions,2 as well as a reduced corporation franchise tax rate.3 In order to qualify as a QHTC, a business must: Be an individual or entity organized for profit; Lease or own an office in the District; Have two or more qualified employees within the District; Derive at least 51% of its gross revenues earned in the…
As 2018 drew to a close, many of us took a moment to express gratitude for the wonderful things in our lives and made plans to live a little better in the coming year. In looking ahead, we can all learn from Ben the bulldog. He sent Eversheds Sutherland SALT his list of 2019 resolutions via Chris Kmak, Director, State and Local Tax, at Intel Corporation. As you will see, Ben is a terrific model…
On December 21, the New Jersey Division of Taxation released Technical Bulletin TB-85, which addresses how the Division will expect taxpayers to calculate the amount of so-called global intangible low-taxed income (GILTI) and foreign derived intangible income (FDII) that are taxable for New Jersey corporation business tax (CBT) purposes. Background: GILTI and FDII under Federal Tax Law The Federal Tax Cuts and Jobs Act (TCJA) created a new category of income under Internal Revenue Code…
On November 2, 2018, the Chief Counsel of the California Franchise Tax Board issued Chief Counsel Ruling No. 2018-01, determining: (1) that a taxpayer servicing mortgages was not a financial corporation for purposes of the corporation franchise tax; and (2) gains from interest rate hedging contracts are general income, not money or moneyed capital. Although the taxpayer earned origination income, interest income and net gains from sales of mortgages, its primary revenue was from servicing…
The California Court of Appeal affirmed a trial court decision finding that transactions involving an Internet retailer headquartered in Brisbane, California, were subject to local use tax, rather than local sales tax, because title in the transactions at issue passed outside California. The court explained that when a retail seller delivers goods to a common carrier at an out-of-state warehouse for shipment to a customer in California, title will pass to the buyer at the…
The November 26, 2018, release by the Internal Revenue Service of proposed regulations (REG-106089-18) related to IRC § 163(j) has provided some clarity for federal income taxpayers. But the regulations’ treatment of federal consolidated groups gives rise to complexities and questions as to how the limitation will operate at the state level. This Bottom Line videocast includes: an overview of IRC § 163(j) key elements of the proposed regulations important SALT considerations  …