The BR State + Local Tax Spotlight: June 2024
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Note from the Editors
Welcome to the June 2024 edition of The BR State + Local Tax Spotlight. We know the importance of remaining up-to-date on State + Local Tax developments, which appear often and across numerous jurisdictions. Staying informed on significant legislative developments and judicial decisions helps tax departments function more efficiently, along with improving strategy as well as planning. That is where The BR State + Local Tax Spotlight can help. In each edition, we will highlight important State + Local Tax developments that could impact your business.
We invite you to share The BR State + Local Tax Spotlight with your colleagues and visit Blank Rome’s State + Local Tax webpage for more information about our team. Click here to add State + Local Tax to your subscription preferences.
Updates from previous editions:
In the March 2024 edition of The BR State + Local Tax Spotlight, Irwin M. Slomka authored an article titled “Microsoft Prevails in California Dispute on Inclusion of Gross Foreign Dividends in Apportionment Formula.” We had previously updated in the April 2024 edition of The BR State + Local Tax Spotlight that the California Office of Tax Appeals (“OTA”) had designated its 2023 opinion in Appeal of Microsoft Corporation and Subsidiaries as non-precedential, and in the May 2024 edition of The BR State + Local Tax Spotlight that the Counsel On State Taxation had recommended to the OTA that the OTA re-designate its opinion as precedential. As a further update, the Multistate Tax Commission has asked the OTA to continue to designate the decision as non-precedential. In addition, as part of California’s budget for the upcoming fiscal year, California has adopted changes to its apportionment rules in response to Appeal of Microsoft Corporation and Subsidiaries.
In the December 2023 edition of The BR State + Local Tax Spotlight, Eugene J. Gibilaro authored an article titled “State Tax v. Local Tax – Is There a Difference?” in which he discussed the Pennsylvania Supreme Court’s decision in Zilka v. Tax Review Board of Philadelphia. We had previously updated in the May 2024 edition of The BR State + Local Tax Spotlight that the Appellant in that case (Diane Zilka) has petitioned the Supreme Court of the United States for a writ of certiorari. As a further update, in a June 10 order, the U.S. Supreme Court invited the solicitor general to file a brief in the case.
Joshua M. Sivin, Melanie L. Lee, and Summer Associate Lilian O. Umetiti
ARTICLES
Missouri Court Rules Nonresidents Not Subject to Local Tax When Working Outside the Locality
By Craig B. Fields
As the result of the COVID-19 pandemic, many states and localities tried to continue taxing nonresident employees who stopped working from their employer’s location and began working from home in another jurisdiction. Read More >>
Arkansas Supreme Court Finds Online Travel Companies Not Liable for Hotel Taxes
By Joshua M. Sivin
Reversing a decision from a circuit court, the Arkansas Supreme Court held last month that a group of online travel companies, including Hotels.com, Expedia, and Orbitz, were not liable for state and local gross receipts and tourism taxes, penalties, and attorneys’ fees and costs totaling over $45 million because the companies were not providing or furnishing accommodations to transient guests. Read More >>
NYS Tax Appeals Tribunal Finds SaaS Fees Are Subject to Sales Tax
By Eugene J. Gibilaro
The New York State Tax Appeals Tribunal recently upheld a sales tax assessment issued to a company that provided services to customers mostly through what the company described as a software-as-a-service model. Read More >>
WHAT’S SHAKING: BLANK ROME STATE + LOCAL TAX ROUNDUP
Blank Rome’s nationally prominent State + Local Tax attorneys are thought leaders in the community as frequent guest speakers at various local and national conferences throughout the year. We invite you to attend, listen, and learn as our State + Local Tax attorneys interpret and discuss key legal issues companies are facing and how you can put together a plan of action to mitigate risk and advance your business in accordance with state and local tax laws. Read More >>