SeeSALT BlogPillsbury Special Counsel Zack Atkins was recently quoted in Tax Notes State and Law360 discussing the challenges presented by market-based sourcing. Read more here. Continue Reading ›
Articles Posted in Market-Based Sourcing
28th Annual Paul J. Hartman State and Local Tax Forum
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Pillsbury SALT attorney Zachary AtkinsZachary Atkins will present
“Market-Based Sourcing, the Continuing Conundrum” during the 28th Annual Paul J. Hartman State and Local Tax Forum on October 28. The Professor Paul J. Hartman Memorial State and Local Tax (SALT) Forum, sponsored in conjunction with the Vanderbilt University Law School, provides industry, practitioners and state revenue employees the opportunity to participate in a quality forum exploring significant national developments and trends in state and local taxation.
Taxpayer Files Court Action Challenging California’s Proposition 39 (2012) and its Mandatory Single-Sales Factor Apportionment Formula
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In One Technologies LLC v. Franchise Tax Board, an out-of-state California corporate taxpayer filed suit in California trial court challenging the state’s mandatory single sales factor apportionment formula on the basis its passage in 2012 via voter initiative Proposition 39 unconstitutionally violated the “single subject rule.”
California’s Long-Awaited Market-Based Sourcing Regulation Amendments: Why Participate in the Formal Regulatory Process?
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Five years and six interested parties meetings later, California is finally ready to proceed with the formal rulemaking process to adopt substantial amendments to its market-based sourcing rules. At the Franchise Tax Board’s September 9, 2021 meeting, FTB staff requested permission and received approval from its three-member Board to commence the formal regulatory process under California’s Administrative Procedure Act (APA) to amend California Code of Regulations, Title 18, section 25136-2 (Regulation 25136-2). Continue Reading ›
COST Central West Regional State Tax Webinar
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Pillsbury SALT attorneys Carley Roberts, Annie Huang and Robert Merten III will present at the COST Central West Regional State Tax Webinar on March 24.
TEI’s Wisconsin Chapter Meeting
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Pillsbury SALT attorneys Carley Roberts, Marc Simonetti, Zachary Atkins, Nicole Boutros and Evan Hamme will present during Tax Executive Institute’s Wisconsin Chapter Meeting on February 18.
Continue Reading ›
How to Be Reasonable When Reasonably Approximating the Market: Part I
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Partner Carley Roberts and counsel Robert Merten III authored Part 1 of a multi-part series in Tax Notes State’s SeeSALT Digest to review the landscape of market-based sourcing rules and provide an in-depth focus on various states’ use of reasonable approximation.
Read more here. Continue Reading ›
COST’s 51st Annual Meeting
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Pillsbury SALT partner Annie Huang will present during COST’s 51st Annual Meeting on October 22. Partnering with Robert Johnson (Crowe), Eran Liron (PwC) and Ruben Sislyan (Greenberg Traurig), Annie will present “Market Sourcing through Alternative Apportionment or Creative Characterizations of Activity,” moderated by Stephanie Do (COST). Few issues have created greater angst or spawned more litigation than state efforts to impose market sourcing of services on out-of-state taxpayers. As the service sector has grown, so has single-sales factor apportionment, which often makes market sourcing an all-or-nothing proposition to both states and taxpayers. Although many states have modified UDITPA to move from COP to market sourcing, many have not and are using tools such as Sec. 482, forced combination, and creative characterizations of benefits received. And states that changed are trying to stanch the revenue outflow from in-state service companies as well. This session will provide an overview and discussion of some of the more bizarre and inconsistent approaches taken by states on this issue.
COST’s 51st Annual Meeting offers sessions of interest to every state tax professional in industry, whether a COST member or otherwise, as well as in the consulting, accounting and legal profession. The program covers all types of state and local taxes that business taxpayers are confronted with today and provides updates on key SALT issues.
For more information and to register, please click here.
TEI Silicon Valley Chapter’s State & Local Tax Day & IPT Joint Meeting
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Pillsbury SALT was proud to present TEI/IPT Silicon Valley’s State and Local Tax Day & IPT Joint Meeting on December 5! The team presented a 3/4-day seminar that focused on topics related to the State and Local Tax implications of the Tax Cuts and Jobs Act, the U.S. Supreme Court’s decision in Wayfair, and other hot topics in state and local taxation.
“Interactive” Website Will Defeat P.L. 86-272 Immunity If the MTC Has Its Way
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The Multistate Tax Commission (MTC) is updating its Public Law 86-272 guidance, “Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States under Public Law 86-272,” to address internet activities. This guidance was last updated in 2001. The latest draft guidance, dated October 15, 2019, provides examples of when the use of an “interactive” website will defeat P.L. 86-272 immunity, even if the company has no other contact with the customer’s state. Such examples include:
- providing post-sale assistance to customers via either electronic chat or email accessed through a website link;
- soliciting and receiving online applications for branded credit cards;
- inviting viewers to apply for employment;
- contracting with a marketplace facilitator, whose marketplace offers for sale the company’s products via a website and maintains the company’s inventory;
- inserting internet “cookies” into the computers or other electronic devices of customers; or
- remotely fixing products via the internet and WiFi.
Having one of the listed internet activities—by itself—would cause a company that has limited its in-state activities to solicitation of sales to lose its P.L. 86-272 immunity according to the draft guidance. In effect, the MTC’s draft guidance would eviscerate P.L. 86-272 protection given today’s digital economy.
The October 15, 2019, draft “Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States under Public Law 86-272” can be accessed here. More information can be found on the MTC’s web page.