Welcome to the July 2026 edition of The BR State + Local Tax Spotlight. We know the importance of remaining up-to-date on State + Local Tax developments, which appear often and across numerous jurisdictions. Staying informed on significant developments and decisions helps tax departments function more efficiently, along with improving strategy as well as planning. That is where The BR State + Local Tax Spotlight can help. In each edition, we will highlight important State + Local Tax developments that could impact your business. In this issue we will be covering:
- Tax Regulations Go Down: State Regulations May Also Tumble
- Texas City’s “Fee” Struck Down as Impermissible, Tax and Attorney’s Fees Awarded
- New Jersey Tax Court Finds Holes in the Donuts and the Director’s Arguments
- New York Appellate Court Upholds Application of “Convenience of Employer” Rule Against Connecticut Law Professor
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Updates from previous editions. In the May 2025 edition of The BR State + Local Tax Spotlight, Mitchell A. Newmark authored an article titled “New York State Court Chops Retroactivity of Recent P.L. 86-272 Regulation” in which he discussed the New York State Supreme Court’s decision in American Catalog Mailers Association v. Dep’t of Taxation & Finance. In our May 2026 edition of Spotlight, we provided an update that the New York State Supreme Court, Appellate Division, Third Department, affirmed the lower court’s decision that the State’s internet activities rule does not violate federal Public Law 86-272 protections. In June 2026, the American Catalog Mailers Association appealed the Appellate Division’s decision to the New York Court of Appeals on constitutional grounds. The Court of Appeals asked the parties to respond to the question of whether the appeal involved a substantial constitutional question, such that an appeal as of right is permitted. Each party submitted a letter brief in response, and the Court is currently considering whether it has jurisdiction to hear the appeal.
In the November 2024 edition of The BR State + Local Tax Spotlight, Eugene J. Gibilaro wrote an article titled “Unlike a Fine Wine, Tax Issues Do Not Get Better with Age” in which he discussed the New York Tax Appeal Tribunal’s decision in Matter of the Petition of Cushlin Ltd.. On July 16, 2026, the Third Judicial Department of the State Supreme Court, Appellate Division upheld the Tribunal’s decision, finding that the taxpayer failed to meet its burden of proof to establish that the State’s corporate franchise tax assessments lacked a rational basis.
Joshua M. Sivin, Melanie L. Lee, and Summer Associate Caroline Savini
ARTICLES
Tax Regulations Go Down: State Regulations May Also Tumble
Tax regulations are going down after Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024), in which the U.S. Supreme Court concluded that “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Read More >>
Texas City’s “Fee” Struck Down as Impermissible, Tax and Attorney’s Fees Awarded
As we have covered previously in the BR State + Local Tax Spotlight, Texas localities may not impose impermissible taxes under the guise that they are simply charging permissible regulatory fees. Read More >>
New Jersey Tax Court Finds Holes in the Donuts and the Director’s Arguments
Continuing to build on its reputation as a rational and fair adjudicative body, the New Jersey Tax Court recently refused to uphold a regulation whose language and effect contradicted and overstepped the bounds of its enabling legislation. Read More >>
New York Appellate Court Upholds Application of “Convenience of Employer” Rule Against Connecticut Law Professor
In a widely watched case, the New York Appellate Division has rejected a claim by a law professor at Cardozo Law School in New York that days he worked at home in Connecticut during the COVID-19 lockdown should not be treated as New York workdays. Read More >>
WHAT'S SHAKING: BLANK ROME STATE + LOCAL TAX ROUNDUP
Blank Rome’s nationally prominent State + Local Tax attorneys are thought leaders in the community as frequent guest speakers at various local and national conferences throughout the year. Our State + Local Tax attorneys believe it is necessary to educate and inform their clients and contacts about topics that will impact their businesses. We invite you to attend, listen, and learn as our State + Local Tax attorneys interpret and discuss key legal issues companies are facing and how you can put together a plan of action to mitigate risk and advance your business in accordance with state and local tax laws. Read More >>
© 2026 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.