Welcome to the October 2017 issue of the Aprio State & Local Tax (SALT) Newsletter.
With dozens of different taxes imposed by the 50 states (and thousands of local jurisdictions), we recognize how challenging it is to keep up with current issues and developments. This newsletter is designed to provide insights on developments in state and local taxes including new legislation, regulations, rulings and cases addressing issues such as corporate and personal income taxes, sales and use taxes, nexus, franchise/net worth taxes, etc.
This issue of the newsletter includes articles addressing (i) a refund opportunity based on an Alabama decision regarding NOL carryforward limitations, (ii) the impact of an acquisition on California's water's edge combined filing election, (iii) Virginia's cost of performance sourcing methodology, (iv) sourcing of New York sales tax when users are located both inside and outside the state and (v) North Carolina's and Michigan's opposite views of countertop fabricators as manufacturers for sales and use tax purposes.
In case you missed prior issues of this newsletter, please click here. Please note that due to the holidays, our next issue will be a double issue for November/December 2017 and will be issued around mid-December.
If you have any comments, questions or suggestions regarding current or future topics, or if you would like to learn more about Aprio's SALT Practice, please email us at [email protected]. Thank you.
Jeff Glickman, J.D., LL.M.
Partner-in-Charge, State & Local Tax Practice
Alabama Ruling on NOL Limitation Presents Refund Opportunity for Taxpayers
By Alissa Graffius, SALT senior associate
The court determined that Alabama's separate return limitation year rules permit the use of NOLs as long as they were generated while the entity was part of an Alabama affiliated group.
California Ruling Demonstrates Complexity of Combined Group Filing Rules Following an Acquisition
By Jeff Weinkle, SALT manager
When a combined group filing on a worldwide basis acquired a combined group filing on a water's edge basis, California stated that the value of business assets would determine how to file going forward.
Virginia Judge Rules that Taxpayer Can't Source Sales How It Wants
By Jess Johannesen, SALT manager
The court held that other states' methods of taxation did not impact whether Virginia's method was inequitable, meaning states can collectively tax more than 100 percent of the taxpayer's income.
New York Rules that Lump Sum Payment for Software is Taxable to the Extent of In-State Use
By Tina Chunn, SALT senior manager
After clarifying that all charges included in a lump sum for software were taxable, New York determined that the charges should be sourced based on where the software licenses were used.
Recent Rulings in Michigan and North Carolina Highlight Different Scope of Manufacturing Exemption
By Jeff Glickman, SALT partner
Most states provide manufacturers with beneficial treatment for sales and use tax purposes, but states differ vastly on what does and does not qualify as manufacturing.
Aprio's State and Local Tax (SALT) practice advises clients on the state and local tax implications of their business operations, allowing clients to strategically minimize their liabilities and risks. Our team has over 50 years of combined SALT experience working in industry, state departments of revenue, public accounting and private law practice. We specialize in all areas of SALT, including matters related to state tax nexus, corporate and personal income taxes, sales/use tax, franchise/net worth taxes, credits and incentives, and mergers and acquisitions. In addition, we represent clients in administrative matters before state revenue departments around the country, including audit defense and settlement negotiations, pursuing voluntary disclosure agreements and obtaining letter rulings.
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