In This Issue:

- “Functional Equivalent” Nexus: When Goodwill Goes Bad in New Mexico

- Without Intent to Mislead, Deceptive Trade Practices Claim Fails

- SALT PET(S) OF THE MONTH

- No Louisiana Nexus Over Out-of-State Corporate Partners

- Time to Pay Up: Public Law 86-272 Does Not Protect Watch Distributor’s Merchandising Activities

- Illinois Buys Into Providing Guidance for Deal-of-the-Day Voucher Transactions

- “Dear Illinois Department of Revenue: With all (taxes) due respect…”

- Utah Quietly Expands Affiliate Nexus Statute

- California Shaking:

..California Board of Equalization Skewered for Lack of Process

..Get It in Writing! Bill Requiring Board of Equalization to Publish Written Decisions Passes California Assembly

..Franchise Tax Board’s Broad Audit Authority to Review Returns and Ascertain Correct Amount of Tax Underscored in Enterprise Zone Hiring Credit Decision by California Supreme Court

-Policy Wonk - Georgia Tax Reform 2.0: Three Bills Signed by Governor

- The Sutherland Salt Team

Excerpt from “Functional Equivalent” Nexus: When Goodwill Goes Bad in New Mexico

The New Mexico Court of Appeals held that for purposes of imposing the state’s gross receipts tax, Barnes & Noble Booksellers, Inc.’s (Booksellers) in-state activities may be imputed to an out-of-state retailer (Taxpayer) based on the use of common Barnes & Noble trademarks. New Mexico Tax. & Revenue Dep’t v. Barnesandnoble. com LLC, No. 31, 231 (N.M. Ct. App. Apr. 18, 2012). Notably, Booksellers undertook no physical activities on behalf of the Taxpayer that would independently satisfy the physical presence standard established in Quill. However, according to the court, the goodwill generated by Booksellers’ use of the same Barnes & Noble trademarks helped the Taxpayer establish and maintain a market in the state, thereby creating substantial nexus that is the “functional equivalent” of physical presence under Quill.