Weekly Round-Up: Attempts to Increase Revenue; Fate of the Multistate Tax Compact

Highlights from the 10/28/16 issue of the Weekly State Tax Report :

  • E-Sales Tax Law Doesn't Discriminate: Colorado to High Court
    Colorado's electronic commerce notice and reporting law doesn't discriminate against interstate commerce, and Direct Marketing Association's assault on the law should be turned back, the state said in briefs filed with the Supreme Court. Direct Mktg. Ass'n v. Brohl, U.S., No. 16-267, brief in opposition filed 10/24/16.
  • Supreme Court Summoned in Second Appeal Over Tax Compact
    The U.S. Supreme Court has another chance to take up a case that calls into question the nature and future of the Multistate Tax Compact—and potentially implicates $3 billion in tax liability across the states.
  • Combined Reporting Decisions Require More Thought: Attorney
    State policymakers should “take a fresh look” at combined reporting to better capture business activity within their jurisdictions, according to tax practitioners. Decisions to require combined reporting are often “a knee jerk reaction” based on a checklist of administrative operations, said Arthur Rosen, a partner with McDermott Will & Emery's offices in Miami and New York. But “the key is operational interdependence,” he said Oct. 26 at the Paul J. Hartman State & Local Tax Forum in Nashville, Tenn.
  • States Could See Windfall From Corporate Tax Cuts
    There is a good possibility that the federal government will reduce its corporate tax rates within the next few years as a result of global competition, according to a business representative. To make rate cuts revenue neutral, the tax base would have to be expanded, said Karl Frieden, vice president and general counsel for the Washington-based Council On State Taxation. Without taking their own action, states would then see a “gigantic windfall,” he said Oct. 26 at the Paul J. Hartman State & Local Tax Forum in Nashville, Tenn.
  • California Voters Favor Higher Income Tax on Wealthy
    California voters appear likely to say they want to keep taxing wealthy individuals to pay for schools and health care when they vote Nov. 8. Proposition 55 to extend temporary income tax increases on high-income earners for 12 more years beyond a 2018 expiration date would apply to only 1.5 percent of taxpayers but generate between $4 billion and $9 billion a year. Recent polls are showing a majority of Californians support the measure.
  • Oregon to Decide Whether to Restructure Corporate Taxes
    Voters will decide Nov. 8 whether to transform Oregon's corporate tax base from one determined mostly by net income to one determined mostly by Oregon sales or gross receipts of a relatively small group of large corporations. If Measure 97 passes, it will extract $6.1 billion in revenue from about 1,000 corporations over the 2017-19 biennium, according to a report from the state Legislative Revenue Office.

Some notable developments from the State Tax Developments Tracker –Bloomberg BNA’s tool for monitoring important developments in all the states:

  • Alabama Department of Revenue Announces Extension of TurboTax Deadline to November 15 for Amended Returns
  • District of Columbia Office of Chief Financial Officer Notifies Public of Special Real Property Tax Rates for Tax Year 2017
  • Georgia Department of Revenue Publishes Update on Tax Relief Provided to Hurricane Matthew Victims
  • Nevada Department of Taxation Releases Taxation Revenue Statistics for August 2016

For more information about this and other state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library.

In other developments…  

New Jersey Tax Court – 100% allocation factor unfair, taxpayer and Department’s alternative methods rejected, remanded for reconsideration by PwC

Colorado Amendment 69 by The Tax Foundation

Compiled by Chreasea Dickerson