Developments in Multistate Taxation

Alabama -

The Alabama Department of Revenue, Administrative Law Division, found that a company’s beer distribution rights did not qualify as goodwill under generally accepted accounting principles and, therefore, did not qualify for the goodwill exclusion under Alabama’s business privilege tax. The Chief Administrative Law Judge (ALJ) agreed with the Department’s argument that the beer distribution rights did not meet the definition of “goodwill” because the rights constituted a “contract-based intangible asset” that was both “individually identifiable and separately recognized.” The Chief ALJ ultimately agreed with the Department that because the distribution rights did not meet the definition of goodwill, they did not qualify for the state’s statutory exclusion from net worth.

Indiana -

The Indiana Department of State Revenue ruled that an out-of-state company that made deliveries of its merchandise to customers in Indiana had nexus with the state for sales tax collection purposes. The Department found that the merchandise in question was delivered to the company’s customers in Indiana in the company’s own conveyance, which constituted “an activity with more than a substantial nexus with Indiana” under established U.S. Supreme Court precedent, and that the imposition of a sales tax collection obligation was therefore justified.

Originally published in Corporate Business Taxation Monthly in May 2013.

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Topics:  Business Privilege Tax, Exclusions, GAAP, Multistate Tax Commission, Nexus, Sales & Use Tax

Published In: General Business Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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