The BR State + Local Tax Spotlight: September 2021
Note from the Editor
Welcome to the September 2021 edition of The BR State + Local Tax Spotlight. We understand the unique demands of staying on top of important State + Local Tax developments, which happen frequently and across numerous jurisdictions. Staying updated on significant legislative developments and judicial decisions helps tax departments function more efficiently and improves strategy and planning. That is where The BR State + Local Tax Spotlight can help. In each edition, we will highlight for you important State + Local Tax developments that could impact your business. In this issue, we will be covering:
- A recent New York administrative decision that a taxpayer who became domiciled in New York in December 2014 upon his purchase of a New York City apartment was also a statutory resident of the state from January through November of the same year;
- A recent New York City administrative decision that upheld the addback of federally deductible sales commissions under New York City’s unincorporated business tax;
- The Multistate Tax Commission’s adoption of its revised interpretation of the reach of Public Law 86-272; and
- The New Jersey Division of Taxation’s recent addition of federal Schedule UTP (Uncertain Tax Position) to the list of federal income tax forms and schedules that must be included as part of a full and complete New Jersey Corporation Business Tax Return if a Schedule UTP was included with the Federal 1120.
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ARTICLES
New York State ALJ Determines Taxpayer Was Domiciled in New York for Part of the Year and a Statutory Resident for the Other Part
By Kara M. Kraman
A New York State administrative law judge (“ALJ”) recently determined that a teacher who became domiciled in New York in December 2014 upon his purchase of an apartment in New York City was also a statutory resident of New York from January through November of the same year. Matter of Joseph Pilaro and Joseph Gorrie, NY St Div of Tax Appeals DTA No. 829204, (Aug. 26, 2021). While ALJ decisions are not precedential, this case nevertheless demonstrates the importance of keeping detailed factual records and introducing all factual evidence available when contesting a residency case in New York. Read More »
ALJ Upholds Application of New York City UBT Addback to Payments Made for the “Benefit” of Partners
By Irwin M. Slomka
A recent decision involving the New York City unincorporated business tax addback for payments to partners is an important reminder that the addback may sometimes be applied even for payments that are not made to a partner of the unincorporated business. Matter of Skidmore, Ownings & Merrill, LLP, NY City Tax Appeals Tribunal, Admin. Law Judge Div. TAT (H) 17-21 (UB), (July 30, 2021). Read More »
P.L. 86-272: Has the MTC Put It Down for the Count?
By Hollis L. Hyans
By unanimous vote on August 4, 2021, the Multistate Tax Commission (“MTC”) adopted a revised “Statement of Information Concerning Practices of Multistate Tax Commission and Supporting States under Public Law 86-272” (“MTC Statement”). With this interpretation, the MTC is attempting to so narrowly interpret the reach of Public Law 86-272 (“P.L. 86-272”) that—if the MTC’s interpretation is adopted by states and then sustained by the courts—the result would be a near-total abrogation of the federal statute. Read More »
New Jersey to Require Inclusion of Federal Schedule UTP with CBT Returns—A Bad Idea
By Mitchell A. Newmark
The New Jersey Division of Taxation recently added federal Schedule UTP (Uncertain Tax Position) to the list of federal income tax forms and schedules that must be included as part of a full and complete New Jersey Corporation Business Tax (“CBT”) Return if a Schedule UTP was included with the Federal 1120. It added Schedule UTP notwithstanding that: the U.S. government doubts its usefulness for IRS audits, the Schedule UTP disclosure of relevant IRS statutes do not directly translate to New Jersey state income taxes, and prior New Jersey administrations concluded that the information in Schedule UTP was not sufficiently related to New Jersey tax administration to be of substantial use. 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. Our State + Local Tax attorneys believe it is necessary to educate and inform their clients and contacts about topics that will impact their businesses. 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 »