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Filing Season Reminder: Department Guidance Regarding Massachusetts Partnership and C Corporation Tax Return Filing Due Dates

Effective for tax years beginning after December 31, 2015, the due date for filing federal tax returns for C corporations and partnerships were revised. See Public Law 114-41, the “Surface Transportation and Veterans...more

Massachusetts to Move Forward With New “Cookie” Nexus Regulation Effective October 1

On September 13, Massachusetts issued a final regulation that will require many “internet vendors” without traditional “physical presence” in Massachusetts to collect and remit sales and use tax, effective beginning October...more

South Dakota Supreme Court Strikes Down ‘Kill-Quill’ Law

Just two weeks after holding oral argument, the South Dakota Supreme Court issued its decision in South Dakota v. Wayfair, et al., striking down South Dakota’s “kill-Quill” law. South Dakota’s law would have imposed sales tax...more

Disallowance of Deduction for Interest Paid to Hungarian Affiliate Serves as a Reminder of Department’s Continued Audit Scrutiny...

A case recently resolved at the Appellate Tax Board serves as a reminder that Massachusetts’ auditors continue to aggressively challenge the following intercompany transactions: - Interest deductions for interest paid to...more

Filing Season Reminder: Revisions (and Challenges) to Alternative Apportionment Regulation

Any taxpayers considering taking an alternative apportionment position on its corporate excise tax returns this fall should remember that the Department adopted a revised alternative apportionment regulation, 830 CMR 63.42.1,...more

One Step Closer to Quill’s Downfall? South Dakota Supreme Court Hears Oral Arguments in 'Kill-Quill' Case

The South Dakota Supreme Court heard oral argument in South Dakota v. Wayfair, Inc. The case involves a South Dakota law enacted in 2016 that imposes an economic nexus standard to determine whether out-of-state retailers are...more

SJC Holds that Drop-Shipper has Burden of Proving Sales Were Not Subject to Sales Tax; Is Liable for Tax

In D & H Distributing Company v. Commissioner, the Supreme Judicial Court (“SJC”) considered whether the taxpayer, a distributor located outside of Massachusetts, bore the burden of proving that a drop shipment to a...more

Massachusetts State Tax Developments

Welcome to the latest Reed Smith update on recent developments in Massachusetts state tax. In this update, we’ll discuss the following developments: - Corporate excise tax implications of the Department’s decision to...more

Massachusetts Issues Proposed Regulation Imposing Sales or Use Tax Obligations on “Internet Vendors” Beginning October 1

On July 28, the Massachusetts Department of Revenue (the “Department”) issued Proposed Regulation 64H.1.7 (the “proposed regulation”) that, if adopted, would require “internet vendors” to collect and remit sales tax on sales...more

Pennsylvania Department of Revenue Rules That Information Retrieval Services Are Taxable

The Pennsylvania Department of Revenue has issued a letter ruling advising a vendor that its information retrieval service is subject to Pennsylvania sales tax. The rationale underlying the letter ruling echoes the arguments...more

Pennsylvania Senate Passes Tax Bill

Today, the Pennsylvania Senate passed an amended version of House Bill 542 (HB 542), which includes tax code changes that are estimated to generate $571 million in new revenue. (A brief overview of some of the noteworthy...more

Massachusetts Appellate Tax Board Denies Multiple Points of Use Sales Tax Refund Claims

The Massachusetts Appellate Tax Board (“ATB”) has issued an order denying three sales tax refund claims involving multiple points of use (“MPU”) sourcing. In each case, vendors had filed refund claims arguing that their...more

Recent Nexus Developments: Washington Enacts Legislation Imposing Sales Tax Obligations on “Marketplace Facilitators,” and Ohio...

Washington Governor Jay Inslee signed EHB 2163 July 7, imposing sales and use tax obligations on “remote sellers,” “referrers,” and “marketplace facilitators" beginning January 1, 2018. Businesses subject to the new law may...more

Minnesota Legislature Sends Bill to Governor to Require “Marketplace Providers” to Collect Sales and Use Tax

The Minnesota Legislature passed HF1 to impose sales and use tax collection obligations on “marketplace providers”–defined broadly to capture online websites that facilitate sales of tangible personal property from retailers...more

Pennsylvania Amnesty Begins This Week, but VDA Program Still the Better Option for Many Non-filers

Pennsylvania’s tax amnesty program begins April 21, 2017. Taxpayers that are considering amnesty should remember that Pennsylvania’s voluntary disclosure agreement (“VDA”) program for non-filers remains open during the...more

Pennsylvania Issues Revised Ruling on Sales Tax Treatment of Software-Related Services, Creating a Refund Oppsortunity for Some...

Last week, the Pennsylvania Department of Revenue issued a revised version of a previously issued letter ruling (Letter Ruling SUT-17-001) on the sales tax treatment of software support services. Although the revised ruling...more

MTC Proposed Apportionment Regulations Pass By Special Vote: Here’s What You Should Know

Today, the Multistate Tax Commission (“MTC”) held a special meeting where the whole Commission (a group of member states) voted to approve model apportionment regulations, including provisions concerning market...more

New Jersey Tax Court Clarifies Sales Tax on Software

The New Jersey Tax Court recently issued a decision concluding that pre-written software sold on tangible media was tangible personal property for New Jersey sales tax purposes. Notwithstanding this decision, most business...more

U.S. Supreme Court Denies Cert in Direct Marketing Association v. Brohl

Today, the U.S. Supreme Court declined to review the Tenth Circuit’s holding in Direct Marketing Association v. Brohl, which upheld Colorado’s use tax reporting regime on out-of-state taxpayers. In so doing, the Court also...more

Massachusetts SJC Reaffirms Decision Sourcing 100% of Taxpayer’s Loans to Massachusetts — Confirms Opportunity for Out-of-State...

On August 12, 2016, the Massachusetts Supreme Judicial Court issued its decision in First Marblehead on remand from the U.S. Supreme Court. The decision reaffirms that many taxpayers that (1) file as financial institutions in...more

Massachusetts Court Issues 'True Debt' Decision

On June 8, the Massachusetts Appeals Court once again denied a taxpayer’s claimed deductions from the income and net worth tax base of the corporate excise tax. In a decision that will be a disappointment for taxpayers...more

Mark Nunnelly Leaving Position as DOR Commissioner – DOR Now Seeking 3rd Commissioner in Less Than 2 years

Governor Charlie Baker’s office announced in a press release today that Mark Nunnelly has accepted a new role as Executive Director of MassIT, the state technology office, beginning April 4. In that role, Mr. Nunnelly is...more

Massachusetts Net Worth “True Debt” Litigation Moves Forward—Oral Argument Held, Awaiting Decision

With oral argument and briefing complete, the Massachusetts Department of Revenue’s authority to increase the net worth component of a taxpayer’s corporate excise using its “true debt” analysis is under review by the Appeals...more

Massachusetts Department of Revenue Launches Pilot Program for Settling Uncertain Tax Issues—Lack of Anonymity in Settlement...

Continuing its efforts to improve the process for resolving tax disputes in Massachusetts, the Massachusetts Department of Revenue has released final AP 637 Voluntary Disclosure Program for Settlement of Uncertain Tax Issues...more

Supreme Judicial Court Rules Against Taxpayer in Regency Transportation

On January 6, the Massachusetts Supreme Judicial Court (“SJC”) issued its decision in Regency Transportation v. Commonwealth, finding against the taxpayer. The taxpayer in Regency was a trucking company that purchased...more

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