Sutherland SALT Shaker - Vol. 2 No. 9 - December 2011


In This Issue:

- Waiving the Baton: Louisiana Court of Appeal Rules No Nexus for Passive Limited Partner

The Louisiana Court of Appeal recently ruled that a corporation’s passive ownership interest in a limited partnership doing business in Louisiana is not sufficient to create Louisiana corporate franchise tax nexus.....

- Virginia Taxpayer Fails to Follow Procedure: Must Add Back (At Least for Now)

The Virginia Department of Taxation refused to consider whether a taxpayer was entitled to claim an exception from the state’s addback statute because the taxpayer failed to follow the statutory procedure.....

- Indiana Combination Is Last Resort

The Indiana Tax Court granted a motion for partial summary judgment to AE Outfitters Retail Co. and held that the Indiana Department of State Revenue may require combined reporting only after first determining that other alternative apportionment methodologies would result in an equitable apportionment of the taxpayer’s income.....

- Massachusetts Appellate Tax Board Applies Wicked Mad Scrutiny to Taxpayer’s Intercompany Interest Expense

The Massachusetts Appellate Tax Board recently upheld the Commissioner of Revenue’s denial of deductions for interest expense on intercompany loans.

- These Cases Tried to Go to the U.S. Supreme Court, But the Court Said “No…No…Oh?”

In shocking similarity to the once-popular Amy Winehouse song “Rehab,” the U.S. Supreme Court has denied certiorari in two nexus cases: KFC Corp. v. Iowa, 792 N.W.2d 308 (Iowa Sup. Ct. Dec. 30, 2010) and Lamtec Corp. v. Wash. Dep’t of Revenue, Docket No. 83579-9, en banc (Wash. Sup. Ct. Jan. 20, 2011) but left open the possibility to hear DIRECTV, Inc. v. Levin, 128 Ohio St.3d 68 (Ohio Sup. Ct. Dec. 27, 2010).....

- Who Lost the Remote?: Virginia Disallowed Losses and Combined Reporting

The Virginia Department of Revenue (i) applied its narrow interpretation of the State’s related member add-back provision to disallow discount losses from a taxpayer’s factoring company, and (ii) prohibited the taxpayer and its affiliated factoring company from filing a combined return because the factoring company did not have nexus with the State. Va. Public Document No. 11-162 (Sept. 26, 2011).....

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