Articles Posted in Issues

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A California trial court granted summary adjudication in the American Catalog Mailers Association’s (ACMA) action against the Franchise Tax Board (FTB), invalidating FTB guidance that says certain online activities exceed the protections of Public Law 86-272 for state income tax purposes. This follows the court’s denial of ACMA’s first motion for summary adjudication, which we discussed in detail in an earlier blog post, where the court found ACMA did not carry its burden to show FTB Technical Advice Memorandum (TAM) 2022-01 and amendments to FTB Publication 1050 are facially invalid because they contradict PL 86-272.

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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).

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https://seesalt.pillsburylaw.com/files/2020/05/250px-Seal_of_California.svg_.pngIn the Appeal of Southern Minnesota Beet Sugar Cooperative (2023-OTA-342P) (Beet Sugar), the California Office of Tax Appeals (OTA) issued a precedential opinion holding the California Franchise Tax Board (FTB) is not entitled to apply its FTB Legal Ruling 2006-01 (Apr. 28, 2006) to prohibit taxpayers from including in their apportionment factors property, payroll, and sales that generated statutorily deductible income. The OTA’s guidance on the FTB’s interpretation and application of Legal Ruling 2006-01 in this opinion also has implications beyond the specific issue in Beet Sugar, as the FTB has been attempting to expand the application of the limited legal ruling to other inapplicable situations. For example, an opinion by the OTA in the Appeal of Microsoft Corporation & Subsidiaries (OTA Case Number 21037336) is also anticipated to be issued soon, which appeal concerns whether the FTB is entitled to apply Legal Ruling 2006-01 to prohibit taxpayers from including in their apportionment sales factors statutorily deductible foreign dividend amounts.

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On July 3, 2023, Governor Phil Murphy signed into law A.B. 5323, enacting important revisions to New Jersey’s Corporation Business Tax (CBT)[1] including expanding the definition of what constitutes a “unitary business.”  The expanded definition now includes affiliated entities that may not have previously met the requirements for combined group membership for CBT purposes.      seal-of-new-jersey_800-300x300

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A California trial court denied summary judgment in the American Catalog Mailers Association’s (ACMA) action that seeks to invalidate Franchise Tax Board (FTB) guidance that says certain online activities exceed the protections of Public Law 86-272 for state income tax purposes.  However, the court signaled it may invalidate the FTB’s guidance on the basis it constitutes underground regulations and violates California’s Administrative Procedure Act.https://seesalt.pillsburylaw.com/files/2020/05/250px-Seal_of_California.svg_.png Continue Reading ›

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Congratulations to our Pillsbury SALT team for earning recognition in the 2024 edition of Best Lawyers in America and Best Lawyers: Ones to Watch. best-lawyers-2024-300x200

Partner Jeffrey Vesely was recognized as a Lawyer of the Year in San Francisco for Litigation and Controversy – Tax.

Congratulations to all recognized!

 

Best Lawyers

Jeffrey Vesely (Lawyer of the Year)

Craig Becker

Carley Roberts

Ones to Watch

Christopher Koester

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On July 3, 2023, New Jersey Governor Phil Murphy signed A.B. 5323 into law to amend New Jersey’s Corporation Business Tax (CBT). seal-of-new-jersey_800-300x300The bill enacted a variety of clarifications, corrections and modifications to the CBT.

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