SeeSALT BlogJoin Pillsbury SALT partners Zachary Atkins and Evan Hamme for their presentations at COST’s 56th Annual Meeting.
COST 56th Annual Meeting
Posted
Articles Posted in Market-Based Sourcing
Putting Regulations to the Test: California Taxpayers Cleared to Challenge Regulations in OTA Appeals
Posted
The California Attorney General has confirmed the Office of Tax Appeals (OTA) may decline to apply a tax regulation in a taxpayer appeal if it conflicts with the relevant statute. OTA must afford appropriate deference to the issuing agency, but its authority extends to setting aside the regulation for that appeal. OTA lacks authority to invalidate or repeal the regulation more broadly or to apply its conclusions outside the specific appeal.
TEI’s 2025 Midyear Conference
Posted
SALT partner Aruna Chittiappa will be presenting at TEI’s Midyear Conference on March 17.
California’s Market-Based Sourcing Amendments; Public Hearing Requests Due by Oct. 16
Posted
The California Franchise Tax Board (FTB) announced it has initiated the formal rulemaking process to amend Regulation Section 25136-2, which governs the sourcing of receipts from services and intangible property. The proposed changes would apply to taxable years beginning on or after January 1, 2024.
Continue Reading ›
New Jersey Tax Court Approves Use of Market-Based Sourcing for Years Prior to Legislature’s Adoption of Market-Based Sourcing
Posted
The New Jersey Tax Court held that a taxpayer was entitled to a refund of corporation business tax (CBT) for tax years 2011 and 2012 after determining the taxpayer correctly used a market-based sourcing methodology to source service receipts to New Jersey. In its unpublished April 11, 2024, opinion, the court rejected the argument that the law and regulations in effect during the tax years at issue, which preceded 2018 legislation adopting market-based sourcing, required the use of a cost of performance (COP) methodology.
Maine Expressly Requires Express Scripts to Apportion Services Receipts Using a Look-Through Approach
Posted
On November 7, 2023, the Supreme Judicial Court of Maine held a taxpayer’s receipts from the performance of pharmacy benefit management (PBM) services should be apportioned using a look-through approach. Specifically, the court held such services receipts should be apportioned to the state where the prescription drug is dispensed by retail pharmacies to individual members (i.e., the market member method), rather than the state where the taxpayer’s client’s primary commercial and administrative headquarters is located (i.e., the market client method).
Certainly COP: Florida Court Rejects Department of Revenue’s Attempt to Conflate Costs of Performance Sourcing With Market-Based Sourcing
Posted
On March 1, 2023, a Florida trial court confirmed that costs of performance (COP) sourcing, not market-based sourcing, is Florida’s standard methodology for sourcing service receipts for apportionment purposes. In Billmatrix Corp. v. State of Florida, Department of Revenue, No. 2020-CA-000435 (Fla. 2d Cir. Ct. Mar. 1, 2023), the court strongly rebuked the Florida Department of Revenue for attempting to apply market-based sourcing in contravention of its own COP sourcing regulation. Continue Reading ›
The California Franchise Tax Board Fails to Follow the Order of Its Market-Based Sourcing Cascading Rules
Posted
In the Appeal of Sheward, 2022-OTA-228P (May 25, 2022), the California Office of Tax Appeals (OTA) held the California Franchise Tax Board (FTB) failed to follow its own market-based sourcing apportionment regulation by prematurely using reasonable approximation to source the income of a multistate unitary business. During the tax year 2017, the taxpayer operated a business providing in-person services as a horse racetrack judge in California and Minnesota but failed to file a California return. Related to such services, the taxpayer received Form 1099s from the State of California, the State of Minnesota, and Minnesota Harness Racing, Inc.
The Curious First Meeting of the MTC’s Model Receipts Sourcing Regulations Work Group
Posted
The SALT team briefs the outcomes of the first meeting of the Multistate Tax Commission (MTC).
Read More: Model Receipts Sourcing Regulations Work Group’s Curious First Meeting(pillsburylaw.com)
Pennsylvania Legislation Provides Updates to Corporate Income Tax Law
Posted
The Pennsylvania Governor signed H.B. 1342 to enact changes to the state’s corporate income tax.[1] 
The legislation modifies the corporate income tax in three ways: (1) adopts a bright-line economic nexus standard; (2) adopts market sourcing for receipts from intangibles; and (3) reduces the corporate tax rate and gradually continues to reduce the rate over the next eight years. Continue Reading ›