Not a State Tax –

State tax disputes commonly involve claims that a state cannot tax beyond its geographical boundaries. That principle is at the root of Quill Corp. v. N.D., 504 U.S. 298 (1992), requiring that a taxpayer have some sort of physical presence in a state to justify state taxation. The principle is rarely seen in federal tax disputes, but appeared in an important excise tax decision in 2015, which the IRS now has agreed to follow.

The Foreign Insurance Excise Tax –

Rev. Rul. 2016-03 agreed to follow Validus Reinsurance, Ltd. v. United States, 786 F.3d 1039 (D.C. Cir. 2015). It ruled that 26 U.S.C. § 4371 cannot apply to impose an excise tax of 1 percent on the premium paid by one foreign insurance company to another for reinsurance, when the first insurance company does not do business in the United States...