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Potential Traps for the Unwary in the California Office of Tax Appeals Draft Regulations

The California Office of Tax Appeals (the “OTA”), the new tax tribunal that will be assuming some of the functions of the California State Board of Equalization (“BOE”), has issued its initial set of draft regulations. The...more

Pennsylvania Enacts Tax Bill

On October 30, 2017, Governor Tom Wolf signed House Bill 542 (“HB 542”) into law to make several tax changes that will generate revenue for Pennsylvania’s 2017/2018 budget. In addition to imposing entirely new tax obligations...more

New Jersey Update: Reed Smith Wins Toyota Credit Case at Appellate Division

Today, in a corporation business tax case handled by Reed Smith, the Appellate Division affirmed a 2014 Tax Court decision finding that Toyota Motor Credit Corporation (“Toyota Credit”) was entitled to recompute its tax by...more

Pennsylvania Board of Appeals Sends Sales Tax Refund Claims to Audit: What Do You Do?

The Pennsylvania Department of Revenue’s Board of Appeals (the “Board”) is issuing orders dismissing large and complex sales and use tax refund petitions “without prejudice,” while directing the Department’s Bureau of Audits...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

California Supreme Court Holds Localities Can Apply Documentary Transfer Tax to Transfers of Interests in Property-Holding...

The California Supreme Court, in a 6-1 decision, has held that a city or county may impose documentary transfer tax on the transfer of the ownership interests in a legal entity that owns real property located in the locality....more

California Tax Board Reform Bill Approved Yesterday as Part of the State Budget

Yesterday, June 15, the California Legislature approved Assembly Bill 102 (A.B. 102), a bill that drastically overhauls the role of the State Board of Equalization (BOE) as a tax administrator, and as the highest...more

U.S. Supreme Court Declines to Revisit Carlton, Retroactivity Doctrine

On May 22, 2017, the U.S. Supreme Court denied to hear taxpayer challenges to the retroactive application of changes to tax laws in Dot Foods v. Washington Department of Revenue, and six cases challenging Michigan’s...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

File Federal Change with New Jersey? Apportionment Factor Must Also be Changed—Even if Statute of Limitations Otherwise Closed

On February 22, 2017, the Tax Court issued its decision in General Foods Credit Investors # 3 Corporation v. Director. The primary issue involved whether certain sale-leaseback assets belonged in the taxpayer’s property...more

2/27/2017  /  IRS , State Taxes , Tax Court

The New Jersey Litter Control Fee – Refund Claims Due March 15

Taxpayers in, or making sales into, New Jersey may be subject to the New Jersey Litter Fee. Taxpayers with manufacturing activities have until March 15 to file refunds based on the “wholesaler-to-wholesaler” deduction....more

Did You Make the Multistate Tax Compact Apportionment Election in California? Watch Out for Penalties

On December 31, 2015, the California Supreme Court ruled against the taxpayer in The Gillette Company v. Franchise Tax Board. The United States Supreme Court denied review of Gillette on October 11, 2016. Thus, Gillette is...more

Breaking News: U.S. Supreme Court Denies Review of Gillette

On October 11, 2016, the United States Supreme Court denied review of the California Supreme Court’s decision in The Gillette Company & Subs. v. California Franchise Tax Board. The issue was whether Gillette was required to...more

NJ Tax Court: Despite Place-of-Performance Statute, Market Sourcing Applies to Services

On October 11, 2016, the New Jersey Tax Court published its long-awaited decision concerning the sourcing of interest and other fees related to credit card transactions. The court ruled against the taxpayers and held that...more

Out-of-State Taxpayers Can Reduce Pennsylvania Franchise Tax Under Wynne; Conduct Manufacturing? Your Franchise Tax Should Be Zero...

The Pennsylvania franchise tax has finally expired: 2015 is the last year that taxpayers are required to report and pay it. Because the tax rate has decreased over time, it can be little more than a nuisance for many...more

Pennsylvania Tax Developments - A Reed Smith Quarterly Update

Is Pennsylvania bringing back its tax on “computer-related services”? Pennsylvania’s new “Netflix” tax (enacted as part of Act 84 of 2016) covers more than just digital downloads and streaming services. Effective August 1,...more

Pennsylvania Enacts Tax Bill as Part of Budget Package

Pennsylvania has enacted tax law changes projected to generate $752M in new revenue. The changes include severe restrictions on the vendor sales tax discount for timely filing, imposition of sales tax on digital downloads and...more

NJ Tax Court Denies Interest Addback Exception - Does Your Company Still Qualify?

In a decision published April 26, 2016, the New Jersey Tax Court in Kraft Foods Global Inc. v. Director, Div. of Taxation ruled that a taxpayer couldn’t deduct interest paid to its corporate parent. The taxpayer’s...more

July 11 Deadline to Convert Unpaid N.J. BEIP Grant to Tax Credits

Under New Jersey’s Business Employment Incentive Program, approved businesses that created jobs in New Jersey were awarded annual cash grants. Nearly 500 businesses were awarded grants valued at $1.6 billion. Unfortunately,...more

City of Philadelphia’s BIRT: Is 3-Factor Apportionment Still an Option for Your 2015 Return?

Philadelphia’s business income and receipts tax—the so-called “BIRT”—is imposed at a whopping 6.41% rate.1 Add that to the state-level corporate net income tax of 9.99%, and the combined tax rate on corporate income subject...more

NJ Senators Hold Press Conference on Combined Reporting

New Jersey Senators Lesniak (D), Greenstein (D), and Sarlo (D) held a press conference today concerning combined-reporting legislation that they are sponsoring....more

Pennsylvania’s Commonwealth Court Decides in Favor of Reed Smith Client - Corporate Tax Refund Claim Filed Within Three Years of...

In a unanimous decision, the Pennsylvania Commonwealth Court held that the three-year time limitation for filing refund claims for corporate taxes begins on the date a corporation’s tax return is filed, not the original...more

New Jersey Appellate Court Issues Throwout Ruling

In a decision issued this morning, a New Jersey appellate court ruled that the throwout rule does not apply to intangible holding companies. New Jersey courts have not been kind to the throwout rule. When it was first adopted...more

Pennsylvania’s Commonwealth Court Finds NOL Cap Unconstitutional, Grants Refund to Taxpayer

In a 5–2 decision, the Pennsylvania Commonwealth Court in an en banc panel has held that Pennsylvania’s NOL cap violates the Uniformity Clause of the Pennsylvania Constitution, and granted the taxpayer (Nextel Communications...more

New Jersey Revises Guidance: Mere Delivery Doesn’t Exceed P.L. 86-272 After All

On July 30, the New Jersey Division of Taxation (the “Division”) issued a new technical bulletin (TB-79) concerning corporate income tax nexus and the scope of federal immunity under 15 U.S.C.A section 381 (“P.L. 86-272”)....more

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