Weekly Round-Up: Gillette Seeks Cert, Jock Tax Loses in Tennessee

Highlights from the 6/3/16 issue of the Weekly State Tax Report :

  • Companies Ask U.S. High Court to Review Calif. ‘Gillette' Case

    A return to duplicative taxation of multistate businesses is inevitable if the U.S. Supreme Court lets stand the California Supreme Court ruling that the state wasn't bound by the Multistate Tax Compact's income apportionment formula, four parties from the California case said in their request for review.

  • Retailers: Move South Dakota ‘Quill' Case to Federal Court

    Online retailers are seeking removal of litigation over South Dakota's new online sales tax law from state court to federal court, arguing that the attack on Quill requires a federal forum. Wayfair Inc., Overstock.com Inc. and Newegg.com Inc., all named defendants in a case filed by the state Department of Revenue, jointly filed a Notice of Removal with the U.S. District Court for the District of South Dakota, seeking removal of the case pending in the South Dakota Sixth Judicial Circuit.

  • Game Over for Tennessee's ‘Jock Tax' on NBA Players

    National Basketball Association players will no longer have to pay a tax on the games their teams play in Tennessee. A professional privilege tax of $2,500 per game—with a $7,500 annual cap—had been imposed on both resident and nonresident NBA players since 2009. The tax hasn't been levied on National Hockey League players since 2014, and was never imposed on athletes in the National Football League.

  • Graphic Packaging Files Brief in Texas; ‘Gillette' Sets Tone

    In a case with Texas franchise tax implications, Graphic Packaging Corp. filed a reply brief with the state supreme court challenging the Texas Comptroller's view that its decision to use the Multistate Tax Compact's three-factor apportionment formula had been improper.

  • MTC Hears Concerns About Rules on Hedging and Lending

    Many tax practitioners continue to oppose proposed amendments to the Multistate Tax Commission's General Allocation and Apportionment Regulations that would exclude hedging and lending transactions from the definition of business receipts. During a teleconference meeting of the MTC's Uniformity Committee, tax practitioners voiced concern about the proposed amendments, saying they could cause problems for taxpayers that should be further considered.

  • NYC Tribunal Backs Substance Finding for Bank Subsidiary

    An operating subsidiary set up in Connecticut by the holding company for the New York mortgage bank Astoria Federal Savings and Loan Association had economic substance and didn't have to be included in combined city Banking Corporation Tax returns, the New York City Tax Appeals Tribunal ruled. The holding company, Astoria Financial Corp., used an inactive subsidiary of the mortgage bank that was grandfathered in as a New York banking corporation, Fidata Service Corp., to set up an operating subsidiary in Connecticut.

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

  • Idaho State Tax Commission Proposes to Amend Income Tax Administrative Rules Regarding Apportionment Formula by Financial Institutions

  • Oklahoma Legislature Enacts Law Regarding Tax Credit Based on Federal Earned Income Credit

  • South Dakota Department of Revenue Publishes Fact Sheet Regarding Installation and Repair of Communication Equipment

  • California State Board of Equalization Publishes Special Notice Concerning Interstate or Foreign Commerce Exemption for Trucks and Trailers

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… 

Sales and Use Tax Quarterly Update (Second Quarter 2016), by Ernst & Young LLP

Vermont Enacts Sales Tax Economic Nexus & Vendor Notification Requirements, by PwC

Compiled by Melissa Fernley