For over 65 years, Public Law 86-272 has dictated a state’s ability to assert income tax on an out-of-state business. While the 1959 federal law predated the emergence of e-commerce and digital services and could not have anticipated the way
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A “Source” of Consternation? The Taxation of Telecommunications Companies in Florida
Like many states, Florida’s corporate income tax regime has special rules applicable to telecommunications companies. The tricky part about taxing the telecommunications industry is how to source receipts earned from providing interstate telecommunications services. Put differently, when is a state
Taxing the Intangible: Applying Conventional Definitions to Modern Digital Products
In an ongoing battle against Netflix Inc., the Colorado Department of Revenue has argued that the historical definition of “tangible personal property” is sufficiently broad as to encompass digital goods — including streaming subscriptions.[1] The case, currently in the
It’s None of My Business! Arkansas Court Rules on Business v. Non-Business Income Distinction
Income received by a multistate business is either “business income” or “non-business income.” Although this labeling appears innocuous, the distinction between these two categories of income matters greatly to taxpayers and state departments of revenue alike. While business income is
Maryland’s High Court Hands the State a Big Win in its Digital Ad Tax Dispute, More Challenges to Follow
Last fall, when a Maryland County Circuit Court held that the Maryland Digital Ad Tax violated the dormant commerce clause, the supremacy clause, the Internet Tax Freedom Act, and the First Amendment of the U.S. Constitution, most of the
What’s Next For Maryland’s Digital Advertising Tax?
Maryland’s controversial Digital Advertising Gross Revenues Tax (the “Digital Ad Tax”) recently shot back to the top of the headlines when Maryland Circuit Court Judge, Alison Asti, ruled from the bench that the tax is unconstitutional and violates the federal
Illinois DOR Proposes to Change Income Tax Liability for Businesses that Make Sales to Foreign Countries
The Illinois Department of Revenue (“IDOR” or “Department”) recently issued a Notice of Proposed Amendment to amend its Regulation (86 Ill. Admin. Code § 100.3200) governing the “throwback” and “throwout” apportionment provisions (the “Amendments”). 46 Ill. Reg. ___ (Apr. 15
Sirius XM Prevails in Texas Supreme Court on Sourcing of Receipts from Satellite Signal
In a recently issued taxpayer-favorable opinion, the Texas Supreme Court overturned the court of appeals’ decision holding that the state’s performance-based sourcing statute for service receipts essentially looks to customer location. The Court, relying on the statute’s plain language, then
Texas Supreme Court Rejects Texas Comptroller’s “Receipt-Producing, End-Product” Act Test for Sourcing Receipts from Services
On March 25, the Texas Supreme Court issued a highly-anticipated decision concerning the proper test to source receipts from services for purposes of Texas franchise tax. By statute, receipts from a “service performed in this state” must be sourced to
Louisiana Launches Unique State Transfer Pricing Initiative
Joining Indiana and North Carolina, Louisiana last week became the third state to offer an alternative to the burdensome and expensive process of enduring a state transfer pricing audit.
The Louisiana Department of Revenue announced a short-term voluntary initiative (the “Louisiana