Articles Posted in States

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On November 3, California and San Francisco voters were asked to decide several tax‑related referenda with major implications across all business industries. Although it is too early to state with certainty, voters appear to have rejected Proposition 15, a measure that would introduce a so-called “split roll” property tax system. On the same day, voters in San Francisco overwhelmingly approved a battery of tax-related measures: Proposition F, which overhauls San Francisco’s business taxes; Proposition I, which doubles the real estate transfer tax on transactions exceeding $10 million; Proposition L, which institutes an aggressive new “Overpaid Executive Gross Receipts Tax;” and Proposition J, which repeals and replaces an annual parcel tax.

Pillsbury attorneys Craig Becker, Breann Robowski, and William Bennett explain.

To read the full article, please click here.

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SealofWashingtonStateSeal-300x300The fate of Washington’s Business & Occupation (“B&O”) surtax on large financial institutions remains uncertain as the state’s highest court has not yet decided whether to grant direct review or transfer the state’s appeal to the Washington Court of Appeals.  On July 13, 2020, the State of Washington filed a direct appeal in the Washington Supreme Court seeking to overturn a trial court decision that struck down the state’s recently enacted surtax on large out-of-state financial institutions.  Wash. Bankers Ass’n v. State, No. 19-2-29262-8 SEA (Wash. Super. Ct. May 15, 2020), appeal docketed, No. 98760-2 (Wash. July 13, 2020).  On July 27, 2020, the state filed its statement of grounds for direct review with the Washington Supreme Court and on August 24, 2020, the respondents, the Washington Bankers Association and American Bankers Association (collectively, the “Associations”) filed their answer. Continue Reading ›

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https://seesalt.pillsburylaw.com/files/2020/09/CalTax-Logo_Est.-small_400-300x74.pngPillsbury partners Breann Robowski and Craig Becker will present during CalTax’s Splitting the Property Tax Roll webinar series in October.

Splitting the Property Tax Roll, a webinar series on the Technical Provisions of Proposition 15, will feature a new episode every Tuesday in October.

Breann will present during Episode 1, “California’s Property Tax System” on October 6. The speakers will discuss what California’s property tax system was like prior to the passage of Proposition 13 in 1978, provide an overview of the current property tax structure and how the measure has evolved over time, and discuss the provisions of Proposition 15.

Craig will present during Episode 2, “Ready, Set, Split Roll: The Impact of Proposition 15″ on October 13. This webinar will cover the economic impact of Proposition 15, including how the measure would impact consumers and private-sector employment. Speakers will cover how to interpret Proposition 15, drafting flaws, and how the measure would have specific impact on certain industries, including agricultural properties and vineyards, energy, and telecommunications.

For more information, please visit the event page.

CalTax members may find a recording of Breann’s presentation here and Craig’s presentation here.

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cost-300x90Pillsbury attorneys Craig Becker and Robert Merten III will present during COST’s 2020 Property Tax webinar, held in cooperation with the International Property Tax Institute (IPTI).

Craig will present “California – Examining Property Tax Issues in the Golden State” on Wednesday, September 16 at 4:10pm. The presenters will address how business taxpayers may have to deal with split-rolls, transfer taxes as a result of the intersection of the Ardmore decision and Prop 13, the erosion of Proposition 13 protections through post-Uplands litigation that may make it easier to increase taxes at the local level, and technology transfer agreements. In addition, renovations of buildings have the potential to trigger “New Building” assessments in California.

Robert will present “Your Tax Department Should Work as a Team – Strategies to Make it Work – Even When Working Remotely,” on Thursday, September 17 at 2:05pm. In this session, the panelists will provide examples of how the different tax types intersect and how those relationships need to be taken into account, especially in the current stay-at-home COVID-19 environment.

For more information, please click here.

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In Alaska, a state and local sales tax class action survived a motion to dismiss and motion to strike class allegations after a federal judge determined the plaintiff’s alleged claims were plausible. In Van v. LLR, INC., d/b/a LuLaRoe et al., the plaintiff—an Alaska resident and customer of the defendant retailer—alleged she was improperly charged sales tax on clothing purchased from the out-of-state retailer’s “remote consultants” and shipped to her residence in Anchorage, Alaska. With no state sales tax in Alaska and few local sales taxes, the plaintiff claimed defendant retailer unlawfully collected sales tax on transactions shipped to Alaska for over a year.

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This article was originally published by Tax Notes State.

The Pennsylvania Commonwealth Court released its decision in the much-anticipated Synthes USA HQ Inc. v. Commonwealth case July 24. The case addressed the proper interpretation of Pennsylvania’s sales factor sourcing statute in effect for tax years before 2014, which sourced service receipts to the location where the “income-producing activity” occurred. The commonwealth court deferred to the Pennsylvania Department of Revenue’s interpretation, which construed income-producing activities to occur where the service provider’s customer receives the benefit of the services (benefits-received sourcing method).

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https://seesalt.pillsburylaw.com/files/2020/04/Seal_of_New_York.svg_-300x300.pngA New York trial court held that charges for storage services rendered in New Jersey were not subject to New York sales tax despite the fact that the property was originally picked up in New York. Vital Records, Inc. v. New York State Dep’t of Taxation & Finance, No. 900088-19 (N.Y. Sup. Ct. Albany Cty. Aug. 19, 2020). The case was not heard by the New York State Division of Tax Appeals, which is the typical venue for state tax disputes. Instead, the vendor brought an action against the New York State Department of Taxation and Finance (“Department”) and its executive deputy commissioner in a New York Supreme Court (trial court) seeking declaratory, injunctive, and other relief.

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cost-300x90Pillsbury partners Jeff Vesely and Annie Huang will present “Market-Based Sourcing Issues in the Southwestern States with a Focus on California” during COST’s Pacific Southwest Regional State Tax Webinar on August 27.

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https://seesalt.pillsburylaw.com/files/2020/05/250px-Seal_of_California.svg_.pngThe California Court of Appeal recently came down with a published decision in the Paula Trust case, a case involving the taxation of trusts and limited partners—two very nettlesome issues in California. (Steuer v. Franchise Tax Board, No. A154691, 2020 BL 240383 (Cal. Ct. App. 6/29/20)). The Court of Appeal reversed the trial court and held that the trust was taxable on the entire capital gain generated from the sale of stock in various businesses. The case involves California’s unique and somewhat confusing system of taxing trusts. Generally speaking, the taxability of a trust is dependent upon the residency of fiduciaries (i.e., trustee) and beneficiaries. In this case, there were two trustees—one who was a California resident and one who was a Maryland resident, along with a contingent beneficiary who was a California resident.

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