In a decision with troubling potential implications, a Massachusetts appellate court held that a nonresident individual was subject to Commonwealth income tax on capital gain from the sale of his stock in the corporation that...more
A recent Supreme Court of Arkansas decision has upheld a multistate corporation’s allocation to Arkansas of 100% of its interest expenses from borrowings to fund a spin-off. It also rejected as irrelevant the state’s attempt...more
The New Jersey Tax Court has held that individual taxpayers were not required to include in their New Jersey gross income the undistributed earnings of controlled foreign corporations (“CFCs”) for purposes of the Gross Income...more
A recent New York City (“NYC”) determination limited the impact of the step transaction doctrine under the New York City real property transfer tax (“RPTT”). An Administrative Law Judge (“ALJ”) held that the collapsing of a...more
The Minnesota Supreme Court has held that market research conducted by an out-of-state company’s sales representatives when visiting in Minnesota exceeded “solicitation of orders” and therefore, the company was not protected...more
The New York City Department of Finance (“Department”) has recently announced on its website that its still-pending business corporation tax regulations under City corporate tax reform legislation enacted in 2015 are expected...more
In a pair of decisions, a New York State appellate court has annulled decisions of the New York State Tax Appeals Tribunal that reduced certain tax credits available to the individual shareholders of their S corporation....more
Challenging a state corporate tax determination of a unitary business relationship between related corporations can be difficult. However, a recent decision of the Michigan Tax Tribunal shows that with good facts a business...more
An investment management company subject to California corporate franchise tax was required to source its receipts from the provision of management, administrative, and distribution services furnished to mutual funds based on...more
The challenges in establishing protection under Public Law 86-272 (“P.L. 86-272”) were on display in a recent decision of the Minnesota Tax Court. Uline, Inc. v. Commissioner of Revenue, Minn. Tax Court, No. 9435-R (June 23,...more
On May 3, 2023, New York Governor Kathy Hochul signed into law two bills containing several important tax changes, several of which were not in the Governor’s proposed budget: Bill Nos. S4009-C (Budget) and S4008-C...more
Commission payments made by a New York City-based partnership to an S-DISC, whose shareholders were all partners in the partnership, were subject to the unincorporated business tax (“UBT”) addback as nondeductible payments to...more
Ohio’s ability to tax receipts under the Ohio commercial activity tax (“CAT”) in the case of nationwide contracts that license the right to use intellectual property has now been significantly limited. The Ohio Supreme Court...more
Blank Rome’s nationally prominent State + Local Tax attorneys are thought leaders in the community as frequent guest speakers at various local and national conferences throughout the year. Our State + Local Tax attorneys...more
Can an online merchant have nexus with a state because its merchandise may be stored in the state? And what is the scope of the government’s authority to make inquiries of the out-of-state online merchant to obtain...more
New York State Governor Kathy Hochul has signed into law a bill that imposes “bright-line” economic nexus based on in-City receipts, applicable to tax years beginning on or after January 1, 2022, under the New York City...more
The New York State sales tax on “protective and detective services” has been given an expansive reading by the New York State Tax Appeals Tribunal in a decision involving information technology (“IT”) security services. In In...more
Two recent New York State decisions illustrate the importance of the “primary function” test for determining taxability under the New York State sales tax, in both cases involving the tax on information services. Applying...more
The $10,000 federal cap on the state and local tax itemized deduction for individuals (“SALT limitation”) continues to generate considerable debate, as well as efforts to narrow its scope. Several states have enacted...more
A recent decision involving the New York City unincorporated business tax addback for payments to partners is an important reminder that the addback may sometimes be applied even for payments that are not made to a partner of...more
The New York State Department of Taxation and Finance has issued guidance on the recently enacted New York Pass-Through Entity Tax. Technical Memorandum, “Pass-Through Entity Tax,” TSB-M-21(1)C, (1)I (N.Y.S. Dep’t of Taxation...more
The application of market state sourcing to income from intellectual property continues to be a vexing problem in many states. The Ohio commercial activity tax (“CAT”) sourcing statute is no exception, as evidenced by a...more
On January 19, 2021, New York State Governor Andrew M. Cuomo submitted his Executive Budget, applicable to the state’s fiscal year beginning April 1, 2021. The governor’s proposal, which will now be the subject of public...more