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The California Office of Tax Appeals held the Franchise Tax Board abused its discretion in failing to abate interest for a 248-day delay caused by the FTB’s failure to assign a protest hearing officer to the taxpayer’s protest. Taxpayer wins involving interest abatement requests on appeal are fairly uncommon in California and even more uncommon in precedential opinions. This makes exploring a taxpayer’s recent win before the OTA especially worthy.

The FTB has discretionary authority to abate interest related to a proposed deficiency to the extent the interest is attributable in whole or in part to an unreasonable error or delay by an officer or employee of the FTB in performing a ministerial or managerial act. On appeal, the OTA only reviews FTB’s interest abatement determinations for abuse of discretion. This makes a taxpayer’s burden of proof on appeal much greater than the ordinary preponderance of the evidence standard. The taxpayer must show the FTB exercised its discretion “arbitrarily, capriciously, or without sound basis in fact or law.”

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https://seesalt.pillsburylaw.com/files/2020/04/1920px-Seal_of_New_Hampshire.svg_-300x300.pngIn this burgeoning era of creative and aggressive tax collecting efforts by localities, the New Hampshire Supreme Court has unanimously struck down a state statute from permitting localities to profit from sales of properties acquired by tax deed after the passage of three years.  The Court held the state statute unconstitutional under the state constitution’s taking clause, which prohibits localities from taking property without just compensation.

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Chambers-USA-2020-300x252Pillsbury SALT is proud to announce its inclusion in the Chambers USA 2020 Guide. In 2020, Chambers ranked 28 Pillsbury practices and 79 individual lawyers. Tireless work & deep client relationships again awarded Pillsbury SALT’s Carley Roberts, Jeff Vesely and Marc Simonetti individual recognition. Continue Reading ›

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US-Map_SALT-300x186State income tax relief in the form of tax return filing and tax payment extensions, and the deployment of related administrative guidance, has evolved rapidly in the last several weeks in the face of the COVID-19 crisis. Of the 45 jurisdictions, including the District of Columbia, that impose an income tax on corporations, 40 have established income tax relief to corporate taxpayers in the form of tax payment extensions, return filing extensions and/or various penalty and interest relief during the extension period. Arkansas, Minnesota and Montana are playing hardball, affirmatively announcing no income tax relief will be provided to corporate taxpayers. Massachusetts has announced it purportedly does not have the authority to extend income tax filing or payment deadlines to corporations but has provided late-filing and late-payment penalty relief. And unique as always, Florida still appears to be on the fence.
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https://seesalt.pillsburylaw.com/files/2020/04/Seal_of_New_York.svg_-300x300.pngOn April 3, 2020, New York State enacted the 2021 fiscal year budget (Budget). The Budget contains several tax measures including decoupling from taxpayer relief provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act was signed into law on March 27, 2020 with the primary objective to provide economic relief and greater liquidity to American taxpayers facing hardship because of the COVID-19 crisis. Specifically, the Budget decouples from taxpayer favorable provisions in the CARES Act including the increase to the permitted business interest expense deduction and the beneficial NOL provisions. As a result, New York taxpayers will not receive the benefit of the CARES Act relief provisions for New York tax purposes. Continue Reading ›

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sealofmissouristateseal1-300x300On March 17, 2020, the Missouri Supreme Court held that the use tax definition of “sale” cannot be applied to sales tax cases, turning more than two decades of precedent on its head.  In DI Supply I, LLC v. Director of Revenue, DI Supply sold hotel room furnishings to its parent, Drury Hotels Company (DHC), which operates hotels.  The issue before the court was whether DI Supply’s sales to DHC were nontaxable sales for resale.  DI Supply argued the sales were for resale because DHC transferred the right to use the hotel room furnishings to its guests and included the cost of such items in the nightly room rate. Continue Reading ›

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https://seesalt.pillsburylaw.com/files/2020/03/1200px-Seal_of_Oregon.svg_-300x300.pngThe Regular Division of the Oregon Tax Court just handed down a nexus decision with respect to the collection of an emergency telecommunications tax (E911 Tax).  In Ooma, Inc. v. Department of Revenue, TC 5331 Tax Court, 03/02/2020, the Court concluded that notwithstanding the absence of physical presence in Oregon, a company which provided VOIP services to Oregon customers, was required to collect the E911 Tax. Continue Reading ›

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US-Map_SALT-300x186Forty-four states plus the District of Columbia impose an income tax on corporations. In response to the COVID-19 pandemic, 36 of those 45 jurisdictions have established income tax relief to corporate taxpayers in the form of tax payment extensions. Of those 36, most also extended the return filing deadline and have waived all penalties and interest during the extension period. Four states are playing hardball, affirmatively announcing no income tax relief will be provided to corporate taxpayers: Arkansas, Minnesota, Montana and New Hampshire. Three states seem to be keeping their heads in the sand, having made no announcement at all regarding tax relief to corporate taxpayers: Alaska, Massachusetts, and Pennsylvania. And two states appear to be on the fence: Florida and New Jersey.

See our latest matrix for comprehensive coverage (updated April 14), on state income tax relief to corporations, other business entities, and individuals. Our coverage is organized in a manner that is quick to digest, and links to primary source authority are provided for ease of reference and to track future developments. Pillsbury SALT will continue to track these tax relief developments in the rapidly evolving landscape of the COVID-19 pandemic.

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In a letter ruling published March 16, 2020, the Tennessee Department of Revenue concluded that a contractor’s purchase of materials and equipment for use in the construction and installation of a new steam production facility at a federally owned manufacturing plant was exempt from Tennessee sales and use tax.  Tenn. Letter Rul. No. 20-02 (issued Feb. 10, 2020).

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Seal_of_San_FranciscoIn addition to the COVID-19 pandemic relief federal and state authorities have provided to taxpayers in the form of delayed tax return filing and payment deadlines (see Pillsbury’s 3/21/20 Legal Alert co-authored by Carley and Mike, among others), San Francisco has also issued some relief in connection with its core local business taxes, including its Gross Receipts Tax, Payroll Expense Tax, Commercial Rents Tax and Homelessness Gross Receipts Tax, or collectively the “San Francisco Local Business Taxes.”

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