SeeSALT BlogIn 1993, the California Legislature amended Revenue and Taxation Code (RTC) sections 6011 and 6012 to exclude from California sales and use tax amounts charged for intangible personal property transferred with a technology transfer agreement (TTA) if the TTA separately stated a reasonable price for the tangible personal property (TPP). Nine years later, the State Board of Equalization (SBE) adopted Regulation 1507, Technology Transfer Agreements, to implement and interpret the TTA statutes and to incorporate the California Supreme Court’s holding in Preston v. State Board of Equalization, 25 Cal.4th 197 (2001). Subsequent litigation over the next 13 years in Nortel Networks, Inc. v. State Board of Equalization, 191 Cal.App.4th 1259 (2011) and Lucent Technologies, Inc. v. State Board of Equalization, 241 Cal.App.4th 19 (2015), invalidated portions of Regulation 1507, as well as Regulation 1502 (Computers, Programs and Data Processing). In the nine years since the Lucent decision, the SBE and its successor, the California Department of Tax and Fee Administration (CDTFA), have been engaged in a seemingly endless regulation project.
Articles Posted in Issues
CalTax Foundation Webinar
Pillsbury SALT partner Carley Roberts will participate as a panelist on an upcoming CalTax Foundation webinar on Tuesday, September 10.
Carveouts Count! Taxpayer Wins New Mexico Statutory Carveout Issue Regarding Unity
The New Mexico Court of Appeals has held that a multinational oil and gas production company did not constitute a “unitary corporation” with its foreign subsidiaries, pursuant to statutory carve-out language regarding the term “unitary corporation.”
New Jersey Tax Court Approves Use of Market-Based Sourcing for Years Prior to Legislature’s Adoption of Market-Based Sourcing
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 In its unpublished April 11, 2024, opinion, the court rejected the argument that the law and regulations in effect during the tax years at issue, which preceded 2018 legislation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.
Tennessee Taxpayers Could Reap Billions in Past and Future Tax Savings
Zack Atkins’ comments in Law360 Tax Authority regarding newly passed legislation in Tennessee that could provide taxpayers with up to $1.6 billion in rebates for portions of three years of past payments and up to $400 million in new savings each year.
Read more here.
COST’s 2024 SALT Workshop for Technology Companies
Pillsbury SALT attorneys Carley Roberts, Jeffrey Vesely, Craig Becker, Robert P. Merten III, Zachary Atkins, Evan Hamme and Aruna Chittiappa will present at this year’s SALT Workshop for Technology Companies on August 14 and 15.
2024 Wichita Property Tax Conference
Pillsbury SALT partner Breann Robowski will present at this year’s Wichita Property Tax Conference.
NYU Introduction to State and Local Tax Conference
Pillsbury SALT attorney Aruna Chittiappa will be presenting at NYU’s Introduction to State and Local Tax conference taking place July 22-23, 2024 in New York.
California’s 2024-2025 Budget Seeks to Block $1.3 Billion of Refunds for Water’s Edge Taxpayers, Suspend NOL Deductions, and Limit Tax Credit Utilization
The May Revision of California’s 2024-2025 state budget seeks to block refund claims, worth approximately $1.3 billion for historical tax years, and $200 million per year going forward, by codifying informal guidance recently rejected by the Office of Tax Appeal’s (OTA) decision in the Matter of the Appeal of Microsoft Corporation & Subsidiaries (Appeal of Microsoft) and by granting the Franchise Tax Board’s (FTB) quasi-legislative rulemaking authority exempt from the procedural protections afforded by the Administrative Procedure Act. The May Revision also proposes to suspend net operating loss (NOL) deductions and limit tax credit utilization to $5 million per year for tax years 2025-2027; however, the legislature proposes to apply the changes to tax years 2024-2026 instead.
2024 Summer Tax Institute
Pillsbury SALT partner Robert P. Merten III will participate as an instructor in the 2024 Summer Tax Institute put on by the UC Davis School of Law.