Weekly Round-Up: First Challenge to Alabama Online Sales Tax

Highlights from the 6/17/16 issue of the Weekly State Tax Report :

  • Retailer Newegg Challenges Alabama Online Sales Tax

    Newegg Inc. filed the first appeal challenging Alabama's regulation expanding the state's sales tax jurisdiction to digital sellers with no in-state physical presence. Administrative Rule 810-6-2-.90.03 requires out-of-state sellers with more than $250,000 of in-state annual sales to collect and remit sales tax.

  • Supreme Court Rejects Florida Seminole Tribe Tax Case

    The Seminole Tribe's challenge of a Florida utility tax failed to win a hearing before the U.S. Supreme Court. In rejecting the tribe's petition for certiorari, the court allowed the earlier ruling of the U.S. Court of Appeals for the Eleventh Circuit to stand. The Eleventh Circuit, in its ruling, agreed with the Florida Department of Revenue that Florida puts the legal burden for its utility tax on the utilities, not the end consumers.

  • Pennsylvania Loss Carryover Cap Ruled Unconstitutional—Again

    A Pennsylvania court found the state's cap on tax deductions for prior-year losses to be unconstitutional for a second time, in what a taxpayer's attorney said is an “across the board” ruling, unlike the prior court opinion. A $2 million cap on net loss carryover deductions imposed on taxpayer RB Alden Corp. in 2006 violated the uniformity clause of the state constitution, wrote Senior Judge Dan Pellegrini for the Commonwealth Court of Pennsylvania.

  • Treasury's Debt-Equity Rules May Cancel Out Add-Back Laws

    Add-back statutes may not be available to taxpayers should states conform to the Treasury Department's proposed debt-equity rules, according to practitioners from Deloitte Tax LLP. The Treasury released draft regulations (REG-108060-15) under tax code Section 385 to rein in earnings stripping through excessive indebtedness between related parties—both domestic and foreign.  

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

  • California Film Commission Announces Application Dates for California Film and Television Tax Credit Program 2.0

  • Colorado General Assembly Enacts Law Regarding Changes to the Requirements for Owners of a Licensed Marijuana Business

  • New York Department of Taxation and Finance Offers Tax Break for Odd Jobs and Projects When the Work Is Done by Someone Who Isn't Operating in a Regular Trade or Business

  • Pennsylvania General Assembly Passes Law Providing for Computation of Income Tax Expense for Public Utility Ratemaking Purposes

  • Ohio Supreme Court Reverses Board of Tax Appeals, Finds Tax Commissioner Abuses Discretion Refusing to Refund Double-Interest Penalty

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…  

Louisiana Use Tax Notification Bill Heads to Governor, by KPMG 

Intercompany Debt on Cross-Border Hybrid Instrument Despite IRS Determination Allowing Partial Deduction, by Deloitte

Compiled by Melissa Fernley