The BR State + Local Tax Spotlight: May 2022
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Note from the Editors
Welcome to the May 2022 edition of The BR State + Local Tax Spotlight. We understand the unique demands of staying on top of important State + Local Tax developments, which happen frequently and across numerous jurisdictions. Staying updated on significant legislative developments and judicial decisions helps tax departments function more efficiently and improves strategy and planning. That is where The BR State + Local Tax Spotlight can help. In each edition, we will highlight for you important State + Local Tax developments that could impact your business. In this issue, we will be covering:
- The New York State Department of Taxation and Finance’s proposed revised regulations that update guidance on the state’s Corporate Franchise Tax;
- The Connecticut General Assembly’s decision to not move forward with a proposed amendment that would have added taxation to the state’s False Claims Act; and
- A New York Administrative Law Judge’s ruling in favor of an out-of-state broker-dealer in a case involving the sourcing of its receipt of certain fees.
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.
Eugene J. Gibilaro and Anna Uger
New York State Updates Draft Corporate Franchise Tax Regulations
By Kara M. Kraman
On April 29, 2022, the New York State Department of Taxation and Finance (the “Department”) released what it refers to as a “final update” to its draft corporate franchise tax regulations relating to all topics except for apportionment, which it indicated will be forthcoming in summer 2022. The Department anticipates that it will commence the State Administrative Procedure Act process in fall 2022 to formally propose and adopt these draft regulations and asks that comments be provided by June 30, 2022. Once finalized, these regulations will provide welcome guidance on the corporate franchise tax reform law that went into effect over seven years ago on January 1, 2015. Read More »
Tax Justice Prevails as Connecticut Sinks FCA Expansion
By Mitchell A. Newmark
The Connecticut General Assembly was heading toward including taxation in the expansion of the state’s False Claims Act, Conn. Gen. Stat. § 4-274, et seq. (the “FCA”) via Senate Bill 426. Expansion of the FCA is laudable to combat fraud. Including taxation in the FCA would have been a huge policy mistake. If S.B. 426 had passed, companies and high-net-worth individuals would have fled Connecticut. S.B. 426 died in the General Assembly, hopefully not to be resurrected in its current form. Read More »
Judge Rules in Favor of Securities Broker-Dealer on Application of New York Broker-Dealer Sourcing
By Irwin M. Slomka
Although it has been more than 20 years since the enactment of customer-based sourcing for registered securities broker-dealers under the New York State corporate franchise tax, there have been few cases interpreting it. Therefore, a recently decided case involving the sourcing of an out-of-state broker-dealer’s receipt of certain fees merits attention. 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»