SeeSALT BlogThe 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).
Articles Posted in New York
“The State of State and Local Taxes”
Pillsbury partners Annie Huang and Carley Roberts discuss “The State of State and Local Taxes” at Tax Executives Institute’s New York State and Local Chapter Meeting on March 5.
“Income Tax – TCJA and Other SALT Matters”
On February 8, Jeffrey Vesely presents “Income Tax – TCJA and Other SALT Matters” during Tax Executives Institute’s New England Chapter Meeting.
Captive Audience: More States Instruct Taxpayers to Include Captive Insurance Companies in Combined Returns
(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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New York Untangles Unauthorized Insurance Co. Taxation
(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.
How to Defend a Remote Access to Software Sales Tax Audit, Part II
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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How to Defend a Remote Access to Software Sales Tax Audit, Part I
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.
Four Things You Should Know about New York State’s Recent Advisory Opinion on the Taxation of Software as a Service (SaaS)
On May 15, 2015, the New York State Department of Taxation and Finance released Advisory Opinion TSB-A-15(2)S which concluded that sales of certain cloud computing services are not subject to New York State sales and use tax. The Advisory Opinion is noteworthy because of the Department’s position on the taxability of licensing prewritten software.
Six New York Tax Reform Decisions to Make in 2015
New York’s corporate tax reform includes sweeping changes affecting nearly every aspect of its corporation franchise tax. Although some taxpayers won’t feel the brunt of the changes until filing their 2015 tax returns in 2016, there are six decisions that should be made now. This article does not address imminent decisions required for New York City, because the city’s tax reform has not been finalized. However, the decisions discussed here will likely be required for the city, particularly if its tax reform is retroactively effective on January 1, 2015.
The remainder of this article can be accessed in the February 9, 2015 edition of State Tax Notes.
Five Things You Should Know About New York State’s Taxation of Convertible Virtual Currency
On December 5, 2014, the New York State Department of Taxation and Finance issued TSB-M-14(5)C, (7)I, (17)S, explaining its policy regarding convertible virtual currency.