SALT Shaker

Shaking things up in state and local tax

It’s None of Your Business: California Office of Tax Appeals Rejects FTB’s Broad Test for Doing Business

By Peter Hull & Timothy Gustafson on September 19, 2019

The California Office of Tax Appeals (OTA) reversed the Franchise Tax Board’s (FTB) determination that an out-of-state limited liability company (LLC) had taxable nexus with California solely because it held an ownership interest in an LLC operating in the state that ranged from 1.12% to 4.75%. California imposes an annual $800 tax on LLCs “doing business” in the state, with “doing business” defined by statute to mean “actively engaging in any transaction for the purpose…

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Submit your pet to be featured as the September SALT Pet of the Month!

By Eversheds Sutherland SALT on September 18, 2019

The Eversheds Sutherland SALT Team is always excited to see what kind of pets our clients and friends have. Our team features a different pet at the end of every month, and we want to feature YOURS! Featured pets will receive a fun prize from the SALT Team. The deadline for September submissions is Friday, September 27. To submit your pet to be featured, visit the Eversheds Sutherland SALT Shaker App, click “Pet of…

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Virtual Pets and the Reality of Taxes – Texas Comptroller Affirms Sales Tax Assessment on Online Gaming Company

By Chris Lee & Ted Friedman on September 18, 2019

The Texas Comptroller adopted a proposed decision issued by an Administrative Law Judge (ALJ) finding that a company owed sales tax on its sales of online gaming services to Texas residents. The company, who had at least one employee in Texas, developed and maintained online interactive social gaming experiences for its registered users, including those allowing for the adoption of virtual pets. The ALJ determined that the company had sufficient nexus with the state and…

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Pennsylvania Freight Broker May Deduct Passed-Through Delivery Fees from Local Gross Receipts

By Alla Raykin & Eric Coffill on September 17, 2019

The court held that the taxpayer, a freight broker, could deduct freight and delivery charges, which it received from its customers and remitted to third-party delivery providers, from gross receipts before calculating a city’s business privilege tax. A local regulation provides an exemption for freight delivery or transportation charges “paid by the seller for the purchaser.” The court rejected the city’s argument that the freight broker was not a “seller” eligible for the exemption, because…

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Marketplace Monday – California Issues Marketplace Guidance

By Michele Borens on September 16, 2019

The California Department of Tax and Fee Administration (“CDTFA”) issued two new special notices addressing marketplace facilitators and its new registration and filing requirements effective October 1, 2019. In Special Notice L-694, the CTDFA reiterated that effective October 1, 2019, a marketplace facilitator is generally required to pay sales tax or collect and pay use tax on all retail sales by marketplace sellers to California customers facilitated through its marketplace. It was also noted that…

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Videocast: SALT Scoreboard – 2019 Mid-Year Review

By Eversheds Sutherland SALT on September 10, 2019

The quarterly Eversheds Sutherland SALT Scoreboard tallies significant state and local tax litigation wins and losses. In this Bottom Line videocast, Eversheds Sutherland attorneys Charles Capouet and Justin Brown discuss the results from the first two quarters of 2019, including: how taxpayers have fared in litigation in the first two quarters of 2019 compared to 2016, 2017 and 2018 three of the main cases from the second quarter of 2019: North Carolina Department of Revenue…

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No Mixed Signals – Texas Appellate Court Finds Telecomm Signal Sales Are Not Tangible Personal Property

By Alexandra Louderback & Timothy Gustafson on September 10, 2019

Consistent with a prior decision of a sister appellate court, Texas’ Texarkana Court of Appeals held that the sale of telecommunication products and signals constitutes the sale of a service for purposes of Texas’ franchise tax. The taxpayer sold electrical, light and radio signals to customers through copper wire, fiber-optic cable and leased telephone lines. At trial and on appeal, the taxpayer argued it sold tangible personal property because the signals were perceptible to the…

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Marketplace Monday – Marketplace Sales Tax Liability

By Michele Borens, Todd Betor & Justin Brown on September 9, 2019

The shift in tax collection responsibility to marketplace facilitators raises issues regarding which party will bear the burden of any additional sales tax liability resulting from a state audit of marketplace transactions. These issues include the extent to which marketplace facilitators can rely on information provided by marketplace sellers, and to what extent marketplace sellers remain subject to audit for transactions facilitated via a marketplace. Audit Liability Relief for Marketplace Facilitators Some states provide broad…

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Marketplace Monday: What to Watch for This Fall

By Michele Borens on September 2, 2019

In this post-Labor Day update, we wanted to highlight the following marketplace discussions to watch for this fall: Northeastern States Tax Officials Association Annual Meeting September 9th through 12th in Providence, Rhode Island. There will be a panel discussion on what states are doing to tax online marketplaces. Multistate Tax Commission (MTC) Marketplace Facilitator Work Group Teleconferences: September 19th October 3rd Fall MTC Committee Meetings November 4th through 7th in San Antonio, Texas. It is…

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SALT Pet of the Month: The dog ate my homework!

By Eversheds Sutherland SALT on August 28, 2019

Eversheds Sutherland’s newest SALT associate, Peter Hull, recently joined our New York office and brought along the latest addition to our SALT pet family, Luna. An adorable, but sometimes troublesome, two-year-old golden retriever, Luna has a knack for mischief – including the time she became “that dog,” and ate Peter’s law school notebook at the end of the semester. Her hijinks don’t end there. Luna will often wait for Peter to leave home and jump…

SALT Shaker

Shaking things up in state and local tax

Blog Authors

It’s None of Your Business: California Office of Tax Appeals Rejects FTB’s Broad Test for Doing Business

Submit your pet to be featured as the September SALT Pet of the Month!

Virtual Pets and the Reality of Taxes – Texas Comptroller Affirms Sales Tax Assessment on Online Gaming Company

Pennsylvania Freight Broker May Deduct Passed-Through Delivery Fees from Local Gross Receipts

Marketplace Monday – California Issues Marketplace Guidance

Videocast: SALT Scoreboard – 2019 Mid-Year Review

No Mixed Signals – Texas Appellate Court Finds Telecomm Signal Sales Are Not Tangible Personal Property

Marketplace Monday – Marketplace Sales Tax Liability

Marketplace Monday: What to Watch for This Fall

SALT Pet of the Month: The dog ate my homework!

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