01 Apr, 2016

Crossing the Line! Connecticut's Most Recent NOL Change

Insights Blog

 

January 10, 49 BC – Julius Caesar leads a legion of his soldiers across the Rubicon River, the boundary line separating the Roman Republic from the frontiers to the north, and as a result breaks the ancient Roman law of imperium.  The eventual consequence of this act, his assassination, occurred on the Senate steps just over five years later on March 15, 44 BC. 

 

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23 Mar, 2016

The State of Tennessee to Tax Remotely Accessed Software

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As technology continues to advance and consumer practices evolve to take advantage of that technology, state tax authorities often struggle to keep pace.  In 2015, Tennessee took a step toward addressing one such change, enacting legislation with new rules governing the taxation of the access and use of computer software.[1]  In part, the new legislation provides that the taxable use of computer software in Tennessee includes the access and use of software that remains in possession of the seller and is remotely accessed by a customer for use in the State. [2]  The new law seeks to ensure that the taxability of software does not depend upon a customer’s method of accessing that software.

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18 Feb, 2016

Virginia NOL in Lock-step with Federal IRC

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The Virginia Tax Commissioner recently[1] reversed the Virginia Department of Taxation’s denial of a three-year carryback for casualty and theft losses permitted under the Internal Revenue Code.[2]  The carryback, which followed the filing of amended federal returns for the same adjustment, was originally denied on examination by the Department of Taxation.

 

 

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28 Jan, 2016

Pennsylvania Franchise Tax Refund Limitation Period Triggered by Actual Payment of Tax

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In Mission Funding Alpha v. Commonwealth, the Pennsylvania Commonwealth Court held that the three-year limitation period for filing a franchise tax refund begins on the date the taxpayer actually pays the tax, and not the date on which the franchise tax return is due.

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21 Jan, 2016

Pennyslvania NOL Cap Found Unconstitutional

Insights Blog

 

In Nextel Communications of the Mid-Atlantic, Inc. v. Pennsylvania, the Commonwealth Court of Pennsylvania recently held that the statutory cap on the net operating loss (“NOL”) carryover deduction violated the Uniformity Clause of the Pennsylvania Constitution because it provided for disparate treatment of taxpayers depending upon their level of taxable income.[1] 

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14 Jan, 2016

Michigan Department of Treasury Concedes Cloud Computing Use Tax Audit Dispute

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Michigan tax liability for cloud based software

Auto-Owners Ins. Co. v. Dep’t of Treasury  – The Michigan Department of Treasury has chosen not to appeal a Court of Appeals decision holding that a taxpayer's use of cloud-based software from third parties does not give rise to use tax liability where: (1) the cloud-based software code was only remotely accessed and thus never "delivered" or (2) the use was incidental to the rendering of professional services.

 

 

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06 Jan, 2016

Considerations for Louisiana's Recently Changed Net Operating Loss

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Lousiana modified NOL for any returns filed afer July 1, 2015Louisiana modified its Net Operating Loss provisions last year for any original or amended return filed on or after July 1, 2015.  The modifications serve as an example of how seemingly simple tax law changes can create a myriad of complexities that taxpayers must consider when filing returns and managing audits.

In a nutshell, the newly enacted statute:

  • Extends the carryforward period to twenty years (previously 15 years);
  • Eliminates the three year carryback provision; and
  • Reduces the amount of the NOL carryforwards to be utilized in any year before 2018 to 72% of taxable income

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18 Nov, 2015

California Court of Appeals Reaffirms Sales Tax Exemption for Technology Transfer Agreements.

Insights Blog

 

On October 8, 2015, the California Second District Court of Appeal held that a manufacturer’s sale of software, delivered via tangible personal property (“TPP”), was exempt from sales tax if sold pursuant to a technology transfer agreement (“TTA”). Lucent Technologies, Inc. v. State Bd. of Equalization, No. B257808, 2015 WL 5862533, (Cal. Ct. App. Oct. 8, 2015).  In so doing, the court reaffirmed its decision in Nortel Networks, Inc. v. Board of Equalization, 191 Cal. App. 4th 1259, 119 Cal. Rptr. 3d 905 (2011), and offered an informative analysis for bundled transactions in California.  Additionally, the court described Lucent as being factually and legally indistinguishable from its 2011 decision in Nortel, and upheld an award to the taxpayer of $2.6 million in reasonable litigation costs after rejecting every legal argument made by the California State Board of Equalization (“SBE”).

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02 Oct, 2015

North Carolina Budget Legislation

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North Carolina Governor Signs Budget Legislation Enacting Various Tax Provision.

On September 18, the NC Governor signed the State’s fiscal 2016-2017 budget legislation which, among other things, decreases the corporate tax rate from 5% to 4%, and includes additional rate reduction triggers. The legislation also gradually adopts a single sales factor apportionment formula which becomes fully effective for tax years beginning on or after January 1, 2018.  As part of the phase-in of a single sales factor, the legislation authorizes a study to examine the effects of market based sourcing on the computation of the sales factor. To support this study the new law requires, as part of the income tax filing for 2015, corporate taxpayers, with apportioned income greater than $10M and an apportionment percentage less than 100%, to file an information return sourcing receipts in accordance with market-based sourcing rules.

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24 Sep, 2015

NYS Corporate Tax Reform FAQ Update

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New York State Corporate Tax Reform FAQs UpdateDepositphotos_27975231_s-2015

 

The New York State Department of Taxation and Finance has updated its “Corporate Tax Reform FAQs” to clarify two provisions of the State’s corporate tax reform law which became effective January 1, 2015.  Specifically, the Department clarified whether certain corporations not otherwise subject to New York Tax are required to be included in a combined return.  The Department also clarified what is considered a “small business loan” for purposes of the subtraction modification provided for in Tax Law Sec. 208.9(s).  An explanation of these two additions to the FAQs is set forth below.

 

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