On April 6, the Third District California Court of Appeal decided Morning Star Packing Company v. California Air Resources Board, a case that challenged California’s cap-and-trade auction process as an unconstitutional tax because it was not enacted by two-thirds majorities in both chambers of the State Legislature, as required for…
On January 30, 2017, the California Legislature Assembly Committee on Revenue and Taxation held an informational hearing on “Life after Lucent: Administering California’s Technology Transfer Agreement Law.” The California State Board of Equalization (SBE) and the Board’s staff are currently wrestling with the meaning of the Technology Transfer Act (TTA)…
As consumer products become more high tech, the line between computers and traditional devices has blurred. Even basic products, such as toothbrushes, alarm clocks, doorbells, smartphones, cameras, home security systems, printers and copiers now include technical software that enables new functionality options for the device. As a general principle, tangible…
(This article originally was published in Vol. 25, No. 4 of the California Lawyers Association’s California Tax Lawyer.) Section 995 and 995.2 of the California Revenue & Taxation Code exempt all software except for basic operational programs from property taxation. Basic input output systems, known as BIOS, draw the line…
(This article originally was published by Law360 on March 17, 2016.) A New York state Division of Tax Appeals administrative law judge issued three determinations addressing the tax implications for unauthorized insurance companies, both life and nonlife.[1] Significant uncertainty has surrounded New York state’s taxation of unauthorized insurance companies since…
In Part I of this series, we shared our experience and insight regarding New York sales tax audits involving online services. We described our strategy of: (1) providing a highly technical description of how a service operates and what users can and cannot do; (2) emphasizing the role of employees…
The Multistate Tax Commission’s (MTC) Annual Conference and Committee Meetings are being held on July 27-30, 2015, in Spokane, Washington. On Tuesday, July 28, 2015, at approximately 1:00 pm PDT (exact time subject to change), an MTC working group will present this model market-based sourcing regulation working draft to the…
Since late 2008, the New York State Department of Taxation and Finance has routinely taken the position that charges for application service provider (ASP) services, software-as-a-serve, or other online services may be subject to New York sales tax as licenses of software, which are taxable as sales of tangible personal…
(This alert was also published as a bylined article by Law360 on July 31, 2015.) Over five years into a personal income tax residency audit by the California Franchise Tax Board (FTB), Gilbert Hyatt filed a civil suit in Nevada state court against FTB alleging tortious conduct by FTB auditors.…
On May 15, 2015, the New York State Department of Taxation and Finance released Advisory Opinion TSB-A-15(2)S which concluded that sales of certain cloud computing services are not subject to New York State sales and use tax. The Advisory Opinion is noteworthy because of the Department’s position on the taxability…