Weekly Round-Up: Individual Income Tax Returns, Online Retailers and Multistate Tax Issues


Highlights from the 10/7/16 issue of the Weekly State Tax Report :

  • A Primer on Trump's Tax Tool: Carrying Over Net Operating Loss
    The ubiquitous chatter and commentary about the leak of Donald Trump's 1995 state tax returns has turned the spotlight on a standard tax tool that often flies under the radar: net operating loss deductions.
  • High Court Urged Again to Review E-Retailer Tax Rule
    Colorado is asking the U.S. Supreme Court whether its foundational standard for when states may impose sales and use tax on out-of-state retailers should be overturned in light of “the explosion of e-commerce to a multi-trillion dollar industry.” The physical presence standard affirmed by the Supreme Court in Quill Corp. v. North Dakota, 504 U.S. 298 (1992) has caused “startling revenue shortfall in many States,” Colorado argued in a conditional cross petition for certiorari.
  • Multistate Tax Group to Poll States on Corporate Tax Rules
    The Multistate Tax Commission voted to seek state input on proposed model amendments that would reflect a market-based approach to sourcing corporate income. The MTC Executive Committee voted unanimously to forward its draft amendments to its allocation and apportionment regulations—under Sections 1 and 17 of the Multistate Tax Compact Article IV, the Uniform Division of Income for Tax Purposes Act.
  • Newegg Amps Up Attack on Alabama Online Sales Tax
    Alabama can't reach for revenue from Newegg Inc.'s sales because the company lacks an in-state physical footprint, according to the retailer. In a reply and amendment to its notice of appeal filed with the Alabama Tax Tribunal, Newegg broadened its challenge to Administrative Rule 810-6-2-.90.03, which requires out-of-state sellers with more than $250,000 of in-state annual sales to collect and remit sales tax.
  • Online Travel Companies, San Diego Spar in Tax Case
    The definition of “rent” keeps travel companies like Orbitz LLC and Travelocity.com LLC from avoiding certain tax liabilities to the city of San Diego, the city's attorney argued in the Supreme Court of California. Kent L. Richland of Greines, Martin, Stein & Richland LLP in Los Angeles, counsel to San Diego, argued that online travel companies can't skirt additional transient occupancy taxes that are calculated based on a percentage of the “rent charged by operator.”
  • Trump Likely Won't Show Taxes After State Returns Leaked
    Donald Trump won't release any new tax information in response to revelations that through various state tax returns, he claimed a massive tax loss in 1995 that potentially allowed him to eliminate his federal income tax bill for almost two decades, according to two people familiar with the campaign's thinking. The New York Times reported that the Republican presidential nominee recorded a $916 million loss on his 1995 income tax return, and as a result may have been able to reduce his tax bills for as many as 18 years.
  • BNA Insights: Startups—Don't Overlook the Ways Tax Incentives Can Help Incubate Your Business
    BDO USA's Chris Bard, Janet Bernier and Chai Hoang look at how a range of federal and state tax incentives and assistance can aid the growth of startup businesses. The authors offer an example illustrating options available to an expanding high-tech company. They write that startups “should consider how federal and state taxing authorities, as well as local economic development agencies, can help them achieve their goals.”


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

    • New Jersey Division of Taxation Issues Letter Ruling Regarding Consequences to S Corporation When Shareholder Fails to Elect to Become Small Business Trust
    • New York Legislature Enacts Law Authorizing Credit for Beer Produced Within New York City by Certain Distributors
    • Indiana Department of Revenue Issues Letter of Findings, Sustains Individual Income Tax Protest as Taxpayer Proves Change of Domicile
    • Maine Board of Property Tax Review Grants Appeal and Abatement in Favor of Taxpayer, Finds Assessment Amounts to Double Taxation and Is Illegal

    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… 

    US District Court dismisses preemption and constitutional claims against Delaware's unclaimed property law by PwC

    California LAO Finds $1 of Every $3 in Film Incentives Go to Projects That Would Have Happened Anyway by The Tax Foundation

    Compiled by Lauren E. Colandreo and Jason Plotkin