Welcome to the June 2018 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 contains articles concerning (i) the United State Supreme Court’s landmark decision throwing out the physical presence nexus requirements and what it means for businesses going forward, (ii) a New Jersey Superior Court opinion denying a subsidiary company a state income tax deduction for interest payments made to its parent, (iii) a Washington tax advisory explaining that enhanced delivery services create nexus, (iv) an Arkansas letter opinion addressing the sales tax impact of charging one price for multiple products/services, at least one of which is taxable, and (v) an Idaho tax commission determination that a flight school that “leases” aircraft to its students may not rely on a resale exemption for its lease of the aircraft from its supplier.

In case you missed prior issues of this newsletter, please click here.

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 jeff.glickman@aprio.com. Thank you.

Jeff Glickman, J.D., LL.M.

Partner-in-Charge, State & Local Tax Practice

States Can Now Force Retailers Without Physical Presence to Collect Sales Tax, Supreme Court Says

By Jeff Glickman, SALT partner

New economic sales tax nexus principles will create additional collection and filing requirements, and businesses must reassess their sales tax compliance obligations now.  

New Jersey Denies Subsidiary’s Interest Deduction on Debt Push-Down

By Jeff Weinkle, SALT manager

Many types of intercompany transactions are subject to adjustment for state income tax purposes, and taxpayers that don't properly structure those transactions can find themselves losing tax deductions.

Washington Explains That Enhanced Delivery Services Create Sales and Use Tax Nexus

By Tina M. Chunn, SALT senior manager

Despite the Supreme Court's ruling that physical presence is no longer a requirement for sales tax nexus, it can still create nexus for a taxpayer if the activities performed in the state on its behalf help to establish or maintain a market in the state.

Idaho Determines that Flight School’s Aircraft Lease is Subject to Sales Tax

By Jess Johannesen, SALT manager

This Idaho ruling demonstrates that wet leases and dry leases are treated differently for sales tax purposes, and that a taxpayer may not rely on a resale exemption when engaging in wet leases.

About Aprio's State and Local Tax Practice

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.