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General Business Constitutional Law Tax

Read need-to-know updates, commentary, and analysis on General Business issues written by leading professionals.

Colorado District Court: IRS Enforcement of Section 280E Is Not A Criminal Investigation

by Fox Rothschild LLP on

Recently, a Colorado business protested the IRS’ disallowance of their business expenses. The IRS alleges that the taxpayer was a Colorado medical marijuana dispensary to which Section 280E applies, as a result the IRS...more

Massachusetts Governor Charlie Baker May Propose Unconstitutional Sales Tax Collection Responsibility on Remote Sellers

BOSTON – January 27, 2017. In an attempt to balance his $40.5 billion budget, Governor Charlie Baker may propose that remote sellers be required to collect Massachusetts sales taxes on sales of tangible personal property made...more

Illinois Supreme Court Holds City of Chicago Went Too Far in Taxing Cars Rented Outside Its Borders

by McDermott Will & Emery on

The Illinois Supreme Court, in Hertz Corp v. City of Chicago, 2017 IL 119945 (Jan. 20, 2017) , held that the City of Chicago’s ruling requiring rental car companies located within three miles of the City to collect tax on...more

Retroactive Tax Law Upheld, Circuit Court Jurisdiction Limited

Before 2014, Alabama sales tax applied only to the sale of prepaid calling cards or authorization numbers, pursuant to Ala. Code §40-23-1(a)(13). In 2014, the Alabama Legislature amended the above statute to “clarify” that it...more

Ohio Supreme Court Finds Quill Does Not Apply to the Commercial Activity Tax

The Ohio Supreme Court has ruled that the Ohio Commercial Activity Tax is a business privilege tax and that the physical presence requirement articulated by the U.S. Supreme Court in Quill does not limit Ohio’s ability to...more

Ohio Imposes Tax on Online Retailers with No Physical Presence in State

by Morgan Lewis on

Ohio Supreme Court decides physical presence is not a necessary condition for imposing commercial activity tax. The Ohio Supreme Court recently ruled that Ohio may impose its commercial activity tax (CAT) on...more

Mississippi Supreme Court Finally Disconnects The Line On Dividend Exclusion Statute In The AT&T Case

by Butler Snow LLP on

In a previous article, we summarized AT&T’s 16-year effort, in two separate lawsuits, to have declared unconstitutional two Mississippi income tax statutes on the alleged basis that they placed a greater tax burden on AT&T...more

The Future of Airbnb in New York

One of the most controversial and popular topics in real estate today involves Airbnb, the online home rental service, and the concept of transient rentals. In New York City, Airbnb’s largest market in the United States, this...more

Alabama Department of Revenue Submits Response in Economic Nexus Test Case

The Alabama Department of Revenue (ADOR) quietly filed its Answer in the ongoing challenge by Newegg, Inc. to the so-called economic nexus threshold set forth in ADOR Rule 810-6-2.90.03 for certain out-of-state retailers. In...more

States Battle E-Retailers and Federal Precedent Over Digital Sales Tax

by Bryan Cave on

South Dakota and several online retailers are currently engaged in a battle over the state’s new internet sales tax law (SB 106) aimed at online businesses who sell products to South Dakota residents but which are not...more

Arm’s Length Royalty Rates Save Medtronic from $1.36 Billion Tax Deficiency

by McDermott Will & Emery on

Addressing whether certain intercompany technology license agreements were negotiated at arm’s length, the US Tax Court rejected the Internal Revenue Service’s (IRS’s) alleged $1.36 billion tax deficiency and determined that...more

Tennessee Takes Out-of-State Sales Tax into Its Own Hands

Are you an out-of-state retailer doing business in Tennessee? If so, take note. The Tennessee Department of Revenue is proposing a new rule mandating certain out-of-state dealers to collect and remit sales and uses taxes to...more

DC Circuit Ruling Threatens to Topple FERC Tax Allowance Policy

by Morgan Lewis on

Court rules that FERC policy permitting a tax allowance for pass-through entities may unjustifiably permit “double-recovery” of tax expense. On July 1, the US Court of Appeals for the District of Columbia Circuit issued...more

Net Operating Loss Cap is Unconstitutional

by Cozen O'Connor on

In RB Alden Corp. v. Commonwealth, No. 73 F.R. 2011 (Pa. Commw. June 15, 2016), the court addressed the taxpayer’s liability for 2006 Corporate Net Income (CNI) Tax on gain from the sale of part of its interest in a...more

Breaking News: Tennessee Submits Proposed Economic Nexus Regulation for Publication

by McDermott Will & Emery on

On June 16, 2016, the Tennessee Department of Revenue (DOR) submitted a new sales and use tax regulation for publication titled “Out-of-State Dealers” that would administratively create an economic nexus threshold. While the...more

Washington ALJ Upholds B&O Assessment on German Company’s Royalty Income

by McDermott Will & Emery on

On May 31, 2016, the Washington Department of Revenue (DOR) Appeals Division released a Determination (No. 15-0251, 35 WTD 230) denying a German pharmaceutical company’s business and occupation tax (B&O) protest. The...more

Alabama Issues Remote Sellers Use Tax Assessments, Newegg Inc. Appeals

by McDermott Will & Emery on

Ever since Alabama’s new economic nexus regulation went into effect, litigation over its constitutionality has been expected given that Alabama Commissioner Julie Magee and Governor Bentley said as much when announcing it...more

Oklahoma Retail Protection Act of 2016: New Oklahoma Sales Tax Law on Internet Sales

by GableGotwals on

Internet sales to Oklahomans will now be subject to new sales tax requirements. HB 2531, entitled the “Oklahoma Retail Protection Act of 2016” (the “Act”), enacted May 17, 2016, becomes effective November 1, 2016....more

Cook County Circuit Court Dismisses 201 False Claims Act Lawsuits

by McDermott Will & Emery on

At a hearing yesterday, Cook County Circuit Judge James Snyder granted the State of Illinois’ (State) Motion to Dismiss 201 Illinois False Claims Act (FCA) cases filed by the law firm of Stephen B. Diamond, PC (Relator)...more

No Surprises in Ohio CAT Nexus Oral Argument

by McDermott Will & Emery on

Oral argument before the Ohio Supreme Court took place on May 3 in the three cases challenging Ohio’s Commercial Activity Tax (CAT) nexus standard. Crutchfield, Inc. v. Testa, Case No. 2015-0386; Mason Cos. Inc. v. Testa,...more

BREAKING NEWS: Sales Tax Battle Breaks Out in South Dakota; Quill’s Last Stand?

by McDermott Will & Emery on

On March 22, 2016, South Dakota Governor Dennis Daugaard signed into law Senate Bill 106, which requires any person making more than $100,000 of South Dakota sales or more than 200 separate South Dakota sales transactions to...more

Economic Nexus Extended Too Far – Hodgson Russ LLP v. Minnesota Department of Revenue

by Hodgson Russ LLP on

During the spring of 2014, Hodgson Russ LLP (“Hodgson”) received a letter from the Minnesota Department of Revenue (“Minnesota Revenue”) that attempted to establish a new low in the states’ “race to the bottom” to establish...more

State & Local Tax Advisory: Direct Marketing Association v. Brohl: What’s Quill Got to Do with It?

by Alston & Bird on

On February 22, 2016, the U.S. Court of Appeals for the Tenth Circuit issued its decision in Direct Marketing Ass’n v. Brohl. 1 The Tenth Circuit reversed the federal district court and held that Colorado’s law imposing use...more

Tenth Circuit Rules Colorado Can Require Remote Retailers to Notify Customers of the State's Use Tax

On Monday, the U.S. Court of Appeals for the Tenth Circuit upheld the constitutionality of a Colorado law that requires remote retailers to notify customers of the state’s use tax requirements and report certain customer tax...more

Tenth Circuit Finds Colorado Use Tax Reporting Regime Constitutional

by Reed Smith on

Today, February 22, the United States Court of Appeals for the Tenth Circuit upheld Colorado’s use tax reporting regime in Direct Marketing Association v. Brohl. In so doing, the court held that ...more

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