Weekly Round-Up: Sales Tax Nexus Legislation; Gillette Review Denied by U.S. Supreme Court

Highlights from the 10/14/16 issue of the Weekly State Tax Report :

  • November Elections Likely Crucial In Remote Sales Tax Battle
    States show no sign of retreating from their “kill Quill” agenda absent an uncertain, post-election congressional solution for the intensifying battle over remote sales taxation, according to leading tax practitioners. The clash between states and remote retailers over cross-border transactions was at the top of state and local tax trends for 2016. 
  • Subaru Reconsiders New Jersey HQ After Tax Pact Exit
    Clamor is rising on both sides of the Delaware River against New Jersey Gov. Chris Christie's (R) pledge to end a reciprocal personal income tax agreement between New Jersey and Pennsylvania. Lawmakers in Pennsylvania and businesses in New Jersey are urging the governor not to withdraw from the pact, which allows cross-river commuters to pay their income taxes in the state where they live, rather than where they work. Businesses have threatened to move because of the change, including Subaru, which told Bloomberg BNA Oct. 13 that it will reassess moving its new U.S. headquarters to Camden, N.J., if the state doesn't reconsider. 
  • Nextel: Pennsylvania Carryover Cap No Danger to Other Taxes
    Striking Pennsylvania's cap on the carryover of net operating losses as unconstitutional wouldn't prevent local governments from imposing other types of taxes, Nextel said in a brief to the state's Supreme Court (Nextel Commc'ns of the Mid-Atlantic, Inc. v Commonwealth, Pa., No. 6 EAP 2016, response brief filed 10/7/16). The brief was filed Oct. 7 after the Pennsylvania House of Representatives’ Republican caucus told the court in August that invalidating the cap on the deduction for corporate income taxes would “open a Pandora's Box” for other types of taxation, and could “raise questions about the ongoing ability of local governments to raise revenue at fixed rates.”
  • Acer/Gateway Pays $6.27 Million to Settle Whistle-Blower Suit
    Gateway Inc. and subsidiary Cowabunga Enterprises Inc. have entered into a $6.27 million settlement with Illinois resolving a 13-year-old whistle-blower claim that the personal computer retailer failed to collect use tax on e-commerce transactions with Illinois consumers (Illinois ex rel. Stephen B. Diamond, P.C. v. Cowabunga Enters., Inc., Ill. Cir. Ct., No. 2007-L-12287, 9/30/16).
  • Supreme Court Denies Review of ‘Gillette’ Tax Compact Case
    The U.S. Supreme Court won't consider the leading case among corporate challenges to five states preventing them from using the income apportionment formula in the Multistate Tax Compact, but may get another request as other cases reach the justices (Gillette Co. v. Cal. Franchise Tax Bd., U.S., No. 15-1442, 10/11/16).
  • New Jersey Plan Would Raise Gas Tax, Kill Estate Tax
    New Jersey's Democrat-led Legislature approved a package that would implement 23-cent-per-gallon tax on gasoline to end a crisis that held up $3.5 billion in road and rail projects. As part of the package, lawmakers also voted to cut New Jersey's 7 percent sales tax in phases to 6.6 percent by 2018, eliminate the estate tax and raise the earned income tax credit to 35 percent of the federal benefit, a boost for the lowest earners.

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 Alabama 2017 Severe Weather Preparedness Sales Tax Holiday February 24-26, 2017
  • Hawaii Department of Taxation Temporarily Adopts Rules Concerning Motion Picture, Digital Media, and Film Production Income Tax Credit
  • North Carolina Department of Revenue Provides Update Regarding Effect of Hurricane Matthew on Filing Tax Returns and Payment of Tax Due
  • Ohio Department of Taxation Proposes to Repeal Certain Rules Concerning Tangible Personal Property Tax
  • South Carolina Department of Revenue Issues Information Letter Regarding Tax Legislative Update for 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…  

North Carolina issues proposed market-based sourcing rules; public comment period through January 3, 2017 by PwC

US Supreme Court agrees to allow states to file complaints in unclaimed property lawsuit against Delaware by PwC

Wireless Tax Burdens Rise for the Second Straight Year in 2016 by The Tax Foundation

Compiled by Chreasea Dickerson