Welcome to the October 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:
- NYS Issues Invalid Tax Notice, So Responsible Person Is Not Liable for Sales Tax
- Washington Court of Appeals Gives Out-of-State Dental Affiliate Another Chance to Fight B&O Tax Nexus
- Unitary is Not a Foregone Conclusion
- No Receipt, No Tax: Ohio Supreme Court Rejects CAT on Phantom List Prices
- Depreciating Returns: Ohio Board Blocks Beneficiary from Claiming Trust's Depreciation Add-Backs
In this issue, we are also pleased to welcome guest author Andrew C. Dagen from Blank Rome’s Trusts & Estates team. In his article titled “Depreciating Returns: Ohio Board Blocks Beneficiary from Claiming Trust’s Depreciation Add-Backs,” he analyzes a recent Ohio Board of Tax Appeals decision and shares important insights on the differences between federal and state income tax treatment of trusts and their beneficiaries. Please visit Blank Rome’s Future Wealth Navigator blog for additional discussion of emerging issues in the areas of trusts and estates and transfer taxation.
We invite you to share The BR State + Local Tax Spotlight with your colleagues and visit Blank Rome’s State + Local Tax webpage for more information about our team. Click here to add State + Local Tax to your subscription preferences.
Updates from previous editions. In the February 2026 edition of The BR State + Local Tax Spotlight, Irwin M. Slomka authored an article titled “New York Appellate Court Upholds Sales Tax on Mixed Bundle of Services and Computer Software but Constrains State’s Position that ‘Primary Function’ Test Cannot Be Used,” in which he discussed a New York Appellate Division decision in Matter of Beeline.com, Inc. v. N.Y.S. Tax Appeals Tribunal. Beeline appealed the Appellate Division’s decision to the New York Court of Appeals. On September 24, 2026, the Court denied Beeline’s motion for leave to appeal.
In the August 2026 edition of The BR State + Local Tax Spotlight, Nicole L. Johnson authored an article titled “Stopping the P.L. 86-272 Evasion,” in which she discussed a decision of the Massachusetts Appellate Tax Board in Smithfield Packaged Meats Corporation and Combined Affiliates v. Commissioner of Revenue. On September 24, 2026, Smithfield filed an appeal with the Massachusetts Appeals Court, challenging the portion of the Board’s decision that went against it.
Joshua M. Sivin and Melanie L. Lee
ARTICLES
NYS Issues Invalid Tax Notice So Responsible Person Is Not Liable for Sales Tax
Since the New York State Division of Taxation issued the wrong notice to an admittedly “responsible person,” an Administrative Law Judge held that no liability could be imposed on her for the sales taxes owed by the company. Read More >>
Washington Court of Appeals Gives Out-of-State Dental Affiliate Another Chance to Fight B&O Tax Nexus
In a recent decision, a Washington appellate court reversed a superior court order that upheld a Business and Occupation tax assessment against a Colorado company, holding that genuine issues of material fact precluded summary judgment for the Department of Revenue. Read More >>
Unitary is Not a Foregone Conclusion
Departments of Revenue (and many taxpayers) treat the concept of a unitary business as an automatic decision when there are related entities involved. Read More >>
No Receipt, No Tax: Ohio Supreme Court Rejects CAT on Phantom List Prices
Can you be taxed on money you never received? Read More >>
Depreciating Returns: Ohio Board Blocks Beneficiary from Claiming Trust's Depreciation Add-Backs
In Milstein v. Harris, the Ohio Board of Tax Appeals affirmed a final determination of the Tax Commissioner of Ohio rejecting a trust beneficiary’s attempt to claim, on his personal Ohio return, depreciation deductions that Ohio law assigns to the trust. 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.