Welcome to the August 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 addressing (i) issues to consider in the state income tax treatment and reporting of IRC section 965 repatriation income, (ii) a Michigan court opinion regarding the technical rules for claiming a bad debt sales tax refund, (iii) New York’s bulk sale requirements and successor liability for sales tax on a business acquisition, (iv) a Texas decision finding that the president and sole owner of a business is personally liable for the business’ unpaid sales tax, but not because he is the president and sole owner, and (v) a Massachusetts Appellate Tax Board ruling that an out-of-state company that outsources is manufacturing activity is still a manufacturer required to use single sales factor apportionment.

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

State Corporate Income Tax Consequences of IRC Section 965 Repatriation Income

By Jeff Glickman, Partner-in-Charge, State & Local Tax

State guidance that has been issued so far reveals the complexity and variation among them, and taxpayers must analyze the rules carefully to understand the impact and ensure they are properly reporting the income.

Michigan Rules That Repossessed Property Does Not Preclude Bad Debt Sales Tax Refunds

By Alissa Graffius, SALT senior associate

Businesses that write off bad debt may be able to claim sales tax refunds, and as this Michigan Supreme Court case reveals, taxpayers need to make sure they follow technical procedures and maintain appropriate supporting documentation.

New York Rules That Purchaser of a Business is Liable for the Seller’s Sales Tax Delinquency

By Tina M. Chunn, SALT senior manager

The New York Division of Tax Appeals held that a purchaser of a business is liable for the seller's sales tax exposure, even when that exposure was due to the seller's acquisition of another business.

Massachusetts Rules Taxpayer Outsourcing its Manufacturing Activities Must Still Use Single Factor Apportionment

By Jeff Weinkle, SALT manager

The Massachusetts Appellate Tax Board determined that an out-of-state company was a manufacturer and therefore required to use single sales factor apportionment, even though it outsourced its manufacturing activities to third parties.

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.