Welcome to the September 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:
- California Loses Unity Issue: Drinks Are on Them!
- No Safe Harbor? No Problem. Alabama Tax Tribunal Rules for Taxpayer on Deductibility of Theft Loss
- Tax Tribunal Discards Department’s Domicile Determination
- California OTA Rejects Securities Broker-Dealer’s Sourcing Under Former Costs of Performance Rule
- New York Tax Appeals Tribunal Upholds Taxability of Document Management Services, Finding Software “Essential” to the Transaction
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.
Update from previous edition. In the February 2026 edition of The BR State + Local Tax Spotlight, Josh Sivin authored an article titled “Wisconsin Appeals Court Snubs Online Ticket Platform,” in which he discussed a Wisconsin appeals court’s decision in StubHub, Inc. v. Wisc. Dep’t of Revenue, finding that the company was a seller responsible for collecting taxes. StubHub petitioned the Wisconsin Supreme Court to review the appeals court’s ruling, and on September 10, 2026, the Wisconsin Supreme Court denied StubHub’s petition for review.
Joshua M. Sivin and Melanie L. Lee
ARTICLES
California Loses Unity Issue: Drinks Are on Them!
The gain from an S-Corporation’s sale of assets of its beverage business conducted in Colorado was not apportionable by California. Read More >>
No Safe Harbor? No Problem. Alabama Tax Tribunal Rules for Taxpayer on Deductibility of Theft Loss
During tax audits and appeals, taxpayers typically bear the burden of proving that they are entitled to a tax benefit or favorable tax treatment. Read More >>
Tax Tribunal Discards Department’s Domicile Determination
Though east and west coast states often steal the spotlight when it comes to aggressive residency positions on audit, a recent decision from the Alabama Tax Tribunal serves as a reminder that domicile and residency issues can plague taxpayers across many jurisdictions. Read More >>
California OTA Rejects Securities Broker-Dealer’s Sourcing Under Former Costs of Performance Rule
Although California adopted single-factor market-based sourcing for corporations a decade ago, disputes under the former “costs of performance” sourcing rule continue. Read More >>
New York Tax Appeals Tribunal Upholds Taxability of Document Management Services, Finding Software “Essential” to the Transaction
In the Matter of NetVoyage Corp.,aka NetDocuments.com, the New York Tax Appeals Tribunal affirmed a notice of determination which upheld the disputed sales tax. 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.