New York Advisory Opinion: Sales Taxability of Webinar and Live Stream Products

The New York Department of Taxation and Finance issued an Advisory Opinion concluding that the petitioner's webinar and live stream products are not taxable, but two of the optional services are subject to state and local sales tax.

28 State Tax Developments You May Want to Know - Sept 12, 2017

The following are state tax and business developments I have curated since September 5th, and posted in the LEVERAGE SALT LinkedIn group:

1. State income tax return extended due dates 2016 calendar year

2. While Virginia Supreme Court Holds “Subject-To-Tax” Means “Actually Taxed,” Determination of “Actually Taxed” is Relatively Broad for Purposes of Addback Exception

3. Corporate Income Tax Rates around the World, 2017

4. Wrapping Up August – and Looking Forward to September

5. How Much Does Your State Collect in Corporate Income Taxes Per Capita?

6. The Virginia Tax Amnesty Program will run for a 62-day period, beginning on September 13, 2017, and ending on November 14, 2017.

7. Guidance for 2017 Tennessee Hall Income Tax Released

8. As Political Division Grows, State Budgets Come in Later (If at All)

9. How Did America's Richest State Become Such a Fiscal Mess?

10. Indiana Ruling Holds that Taxpayer Successfully Showed Nexus with Foreign Jurisdictions for Sales Factor Throwback Purposes

11. New York ALJ Rules in Favor of Taxpayer - Receipts from Online Services Sourced Out-of-State

12. New York State Department of Taxation and Finance Removes Draft Proposed Regulation Section 4-2.12 Regarding Receipts from Certain Services to Investment Companies

13. South Carolina Appellate Court Affirms that Satellite TV Provider Must Source Subscription Receipts Based on Market because Signal Delivery is Income-Producing Activity

14. New York Advisory Opinion Explains Taxation and Sourcing of Interactive Software with Customized Skinning

15. New New York Law Extends Certain Real Property Transfer Tax Rate Reductions to 1 September 2020

16. California FTB proposes new withholding regulation for pass-through entities

17. This week's local policy digest includes the NC Brunch Bill, a housing discrimination ordinance, and a balloon ban.

18. California partnership returns: penalty relief available for 2016 returns and revised extension period in 2017

19. NFL Superstars Sacked by Jock Taxes on Away Games

20. State Revenue Volatility: An Inevitable Challenge With a Workable Solution

21. States vs. Marketplace vs. Third-Party Sellers––The Amazon Sales Tax Challenge

22. First U.S. Prosecution Over ‘Zapper’ Software Nets Guilty Plea

23. New York Tax Office Loses Another Case Against Remote Company

24. South Carolina income producing activity at customer location

25. NORTH CAROLINA IMPORTANT NOTICE: SALES TAX BASE EXPANSION PROTECTION ACT

26. TENNESSEE: Is there more than one formula for apportioning franchise and excise tax?

27. TENNESSEE: 2017 SALES AND USE TAX GUIDE

28. Virginia Supreme Court Rules in Addback Case

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LS to daily curate state tax developments relating to a specific industry, state(s), tax type and issue. You can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.

What Type of Evidence Do You Need?

If you are not a lawyer and you work in the state tax field, over time, after reading court case after court case, you begin to learn what different legal terms mean. If you have read any articles or statutes and regulations regarding the burden of proof taxpayers or departments of revenue must meet when proposing alternative apportionment, you have probably read the terms:

• Preponderance of Evidence
• Clear and Convincing (or Cogent) Evidence

But what do these terms mean?

Preponderance of Evidence

The preponderance of evidence standard is met if the proposition is more likely to be true than not true. Effectively, the standard is satisfied if there is greater than 50 percent chance that the proposition is true.

For example, in Mississippi, starting January 1, 2015, the commissioner may require a taxable corporation that is affiliated with one or more corporations that are not taxable to file a combined return with the affiliated corporation or corporations if he establishes by preponderance of the evidence that the intercompany transactions of the taxable corporation have resulted in the shifting of taxable income from itself to another member or members of its affiliated group not subject to tax. The commissioner may also require a taxable group of affiliated corporations to file a combined return if he establishes by preponderance of the evidence that the intercompany transactions of the corporations have resulted in the shifting of taxable income between members of the affiliated group (Miss Code Ann Sec. 27-7-37(2)(a)(ii)).

Clear and Convincing Evidence

Clear and convincing evidence is a higher level of burden of persuasion than "preponderance of the evidence."

Clear and convincing proof means that the evidence presented by a party during the trial must be highly and substantially more probable to be true than not and the trier of fact must have a firm belief or conviction in its factuality. In this standard, a greater degree of believability must be met than the common standard of proof in civil actions, which only requires that the facts as a threshold be more likely than not to prove the issue for which they are asserted.

This standard is also known as "clear, convincing, and satisfactory evidence"; "clear, cognizant, and convincing evidence"; and "clear, unequivocal, satisfactory, and convincing evidence"; and is applied in cases or situations involving an equitable remedy or where a presumptive civil liberty interest exists.

For your reference, the following is a sample list of cases that have discussed the level of evidence necessary to meet the burden of proof:

1. Equifax, Inc. v. Mississippi Dep’t of Revenue, No. 2010-CT-01857-SCT (Miss. 2013) 
2. CarMax Auto Superstores West Coast, Inc. v. South Carolina Department of Revenue, Docket No. 4953 (S.C. Ct. App. 2012) 
3. Microsoft v. Franchise Tax Board, 139 P.3d 1169 (Cal. 2006)
4. British Land (Maryland) Inc. v. N.Y. Tax App. Trib., 85 N.Y.2d 139, 147-48 (N.Y. Ct. App. 1995)

Note: the definitions above were obtained from "legal burden of proof" - Wikipedia. Other sources provide similar definitions.

17 State Tax and Business Developments You May Want to Know - Sept 5, 2017

The following are state tax and business developments I have curated since August 26th, and posted in the LEVERAGE SALT LinkedIn group:

1. NC market discount income from US govt bonds is not interest

2. CORPORATE CLOSE-UP: THE FTB’S SMALL CAP SOLUTION TO ALLEGED FINANCIAL AND NON-FINANCIAL COMBINED REPORTING APPORTIONMENT DISTORTION

3. COST, EY & State Tax Research Institute Study: Total State and Local Business Taxes (fy16)

4. Oregon revenue online educational services sourced faculty costs

5. State Rundown 8/31: Modernizing Taxes is Sometimes a Sprint, Sometimes a Marathon

6. Oral Arguments Heard in South Dakota’s Challenge to Quill

7. Net Operating Loss Carryforward & Carryback Provisions by State

8. Indiana Files Lawsuit to Defend Out-Of-State Sales Tax Law

9. Amended Colorado Regulations Address Combined and Consolidated Filing and Apportionment

10. Massachusetts DOR Issues Technical Information Release on Policy Change Regarding Treaty-Exempt Income

11. Oregon Tax Court Explains that Only Direct Costs are Relevant in Determining Where Greater Proportion of Costs of Performance Was Incurred

12. Indiana Attorney General Responds to Suit Filed by Trade Groups Regarding Enforcement of New Remote Seller Economic Nexus Law

13. Limited-Time Voluntary Disclosure Program for Out-of-State Sellers Having Click-Through Nexus Runs through November 21 in New Jersey

14. Rhode Island Division of Taxation Explains New Information Reporting and Notice Requirements on Some Remote Sellers - Including Marketplace Facilitators

15. Seattle high-income resident income tax enacted

16. Texas appellate court upholds subcontractor exclusion while reversing and remanding on COGS methodology

17. VA Supreme Ct rules subject to tax exception post apportionment

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LS to daily curate state tax developments relating to a specific industry, state(s), tax type and issue. You can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.

30 State Tax & Business Developments You May Want to Know - August 26, 2017

The following are state tax and business developments I have curated since August 21st, and posted in the LEVERAGE SALT LinkedIn group:

1. KPMG TWIST Podcasts for week of August 21, 2017

2. Texas Amnesty Program Beginning September 1, 2017

3. Texas: Time to file a petition or request a hearing extended starting September 1, 2017

4. Texas Involvement in MTC Online Marketplace Seller VDI

5. The Impact of New Use Tax Reporting Laws for the Future of State and Local Taxes

6. Can You Pay Me Now? Verizon Refunding Taxes in New York

7. States Should Adopt a Version of Colorado’s Remote Sales Tax Law

8. The Many Reasons for the Seattle Income Tax

9. Budget and Tax Center: Costly Tax Cuts in New State Budget Continue Precarious Road Ahead for North Carolina

10. Expect the Unexpected: Nuances of Unclaimed Property Oil and Gas Reporting

11. Ohio enacts several economic development changes

12. State Rundown 8/23: Few Lingering Budget Debates Cannot Linger Much Longer

13. Illinois Proposes Trade-Show Sales Tax Nexus Law

14. Illinois amended regulations provide market-based sourcing guidance and other changes

15. Virginia Circuit Court Rules BPOL Tax in Violation of Import-Export Clause

16. MultiState's Local Policy Digest explores the top legislative developments from municipalities across the U.S.

17. Oklahoma Tax Commission Reminds that Amnesty Program Begins September 1

18. New Texas Law Requires Comptroller to Establish a Tax Amnesty Program Providing for Waiver of penalty or interest, or both

19. Illinois Department of Revenue Publishes Amended Apportionment Rules

20. A Closer Look at New York Draft Proposed Regulations under Article 9-A Business Corporation Franchise Tax Under Subpart 3-9

21. Software Company Royalties Received from Out-of-State OEMs Are Excluded from Sales Factor Numerator in Wisconsin

22. BLOOMBERG BNA Q&A WITH ALSTON & BIRD’S ZACH GLADNEY: PASS-THROUGH ENTITIES NEXT IN LINE FOR NEXUS ISSUES

23. SALES TAX SLICE: 5 THINGS AMAZON FULFILLMENT SELLERS SHOULD KNOW ABOUT THE MTC’S NEW VOLUNTARY DISCLOSURE INITIATIVE

24. CORPORATE CLOSE-UP: OREGON FOLLOWS MTC IN ADOPTING MARKET-BASED SOURCING AND APPORTIONABLE INCOME DEFINITION

25. SALES TAX SLICE: ‘INTERNET TAXES’ EXPLAINED

26. 2017 mid-year sales tax changes

27. The 3 secrets for managing your Amazon inventory

28. The FBA sales tax amnesty program explained

29. The importance of learning what does NOT need to be done, and other things.

30. Don’t Be Lazy: The Billable Hour Has Survived For A Reason Probably the biggest mistake most new lawyers make is that they don’t put in the work.

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LS to daily curate state tax developments relating to a specific industry, state(s), tax type and issue. You can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.

Illinois Proposes Trade-Show Sales Tax Nexus Law

Illinois has proposed a new law for establishing a taxable presence (nexus) when remote retailers attend a trade-show in Illinois.

This rule adds a new section to the Use Tax regulations providing that the presence of an out-of-State retailer or its representative in Illinois for the purpose of engaging in trade show activities establishes nexus for the retailer and requires collection of Use Tax on all sales into Illinois.

The rule, however, creates a "safe harbor" for retailers at trade shows. Provided that a retailer meets 3 conditions, the retailer's presence at a trade show will not trigger collection of Use Tax on sales into Illinois. The 3 conditions are:

1. that the retailer attends no more than 2 trade shows per calendar year;
2. is physically present at those 2 trade shows for an aggregate total of no more than 8 days during any calendar year; and
3. combined gross receipts from sales made at the 2 trade shows during any single calendar year do not exceed $10,000.

The rule describes the types of activities that count toward the 8-day physical presence limitation; sets out how a "day" is calculated; and provides additional information to assist retailers in determining whether their activities fall within the safe harbor created by the rule.

The rule specifies that any sales made in Illinois during the trade show are subject to Retailers' Occupation Tax Act and applicable local taxes.

The rule defines "trade show activities," and provides examples of trade shows that are included within or excluded from the scope of the regulation.

COMMENT:

Everybody loves a 'safe harbor' rule because it provides certainty. The problem with a 'safe harbor' rule is that they seem unconstitutional or at the very least, arbitrary. For example, why are 2 trade shows okay, but not 3? Why are 8 days okay, but not 9? Why are $10,000 in sales okay, but not $11,000?

Not a fan.