Articles Posted in New York

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Pillsbury SALT welcomes Senior Law Clerk Caroline Koo to our award-winning State & Local Tax team!

Caroline advises clients on all areas of state and local taxation, including multistate litigation, planning, audit defense, and controversy issues. She focuses on tax controversy, from audit defense through litigation, and also counsels on multistate tax planning and structuring matters.

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tei new yorkPillsbury is proud to partner with TEI’s NY Chapter to host their State & Local Chapter Meeting. Join Pillsbury SALT and TEI NY Chapter members for “Sales Tax: Transformation in Action.”

In a presentation designed for sales tax compliance professionals at all levels, Sheila Rao, Senior Vice President, TEI NY Chapter, will present a step-by-step study of her company’s sales tax software implementation.

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The New York State Tax Appeals Tribunal (TAT) issued a decision that addresses sourcing “services” vs. the catch-all “other business receipts” for years prior to New York Tax Reform (tax years beginning prior to 1/1/2015). The TAT found that the taxpayer, who provided electronic litigation support to its clients, was not providing a “service” to its clients. Instead, the TAT found the taxpayer’s receipts were properly classified by the Department of Taxation and Finance as “other business receipts.” However, the TAT found for the taxpayer in determining where other business receipts must be sourced. The TAT found that the receipts should be sourced to where they are earned (as provided in the Department’s regulations) and found that the receipts were earned where the taxpayer performed the work resulting in the income, which was at the taxpayer’s Colorado location and not at the electronic devices of the taxpayer’s customers. Matter of Catalyst Repository Systems, Inc., DTA No. 826545 (Tax App. Trib. July 24, 2019).

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On December 6, Marc Simonetti presents “State Tax Roundup: Significant State and Local Developments States’ Reaction to Wayfair and Federal Tax Reform” during Tax Executives Institute’s New York Chapter Meeting.

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(This article was originally published by Bloomberg’s Daily Tax Report: State.)

Recent developments in several key states, including Illinois, New York, Minnesota, and Oregon, will impact many captive insurance companies. These states are moving to include certain captives in corporate income tax combined returns with parents and affiliates. The effect of combination is to tax the captives’ investment income and to disallow the deductions for premiums paid to the captives. New York and Minnesota are also using the federal definitions of “insurance” to determine whether captive insurance companies are combinable and subject to corporate income tax.

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(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 New York state amended its insurance tax provisions (Article 33) in 2003. The Department of Taxation and Finance even issued a technical memorandum in 2012 reversing its prior position on unauthorized life insurance company taxation. These ALJ determinations provide much needed clarity, although questions still remain.

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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 or external data points, such as proprietary databases or communication links with third parties; and (3) comparing the primary purpose of the service to a more traditional (nontaxable) service.

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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 property. Some sellers began collecting sales tax on this basis, and the department has audited and assessed many sellers who did not.