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Note from the Editors
Welcome to the September 2024 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 legislative developments and judicial 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 cover:
- Pennsylvania BF&R Grants Refund to Steadfast Company!
- New York State ALJ Rules on Taxation of a Nonresident’s Income from Restricted Stock Units and Dividends from Those Units
- Nebraska Supreme Court Upholds Denial of Deduction for Section 965 Inclusion Income
- Financial Institution Successfully Defends $13 Million in Research Credits
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Updates from previous editions:
In the March 2024 edition of The BR State + Local Tax Spotlight, Irwin M. Slomka authored an article titled “Microsoft Prevails in California Dispute on Inclusion of Gross Foreign Dividends in Apportionment Formula.” We had previously updated, in the April 2024 edition of The BR State + Local Tax Spotlight, that the California Office of Tax Appeals (“OTA”) had designated its 2023 opinion in Appeal of Microsoft Corporation and Subsidiaries as non-precedential, in the May 2024 edition of The BR State + Local Tax Spotlight, that the Counsel On State Taxation had recommended to the OTA that it re-designate its opinion as precedential, and in the June 2024 edition of The BR State + Local Tax Spotlight, that the Multistate Tax Commission had asked the OTA to continue to designate the opinion as non-precedential and that California had adopted changes to its apportionment rules in response to the opinion. As a further update, the National Taxpayers Union and the California Taxpayers Association have filed separate suits in California trial courts challenging the apportionment law changes recently adopted by the State, arguing that the changes violate both the state and federal constitutions.
In the May 2024 edition of The BR State + Local Tax Spotlight, Irwin M. Slomka authored an article titled “New York City Announces Anticipated Deviations from Recently Promulgated New York State Corporate Tax Regulations.” On September 12, 2024, following virtual discussion sessions held on May 14 - 15, 2024, the New York City Department of Finance issued an update regarding its considered regulations in light of the comments received during the sessions. The update does not contain a specific timeline for the City’s rulemaking.
The BR State + Local Tax Team is pleased to welcome Stephanie N. Terinoni as an associate effective August 26, 2024. In addition to obtaining a J.D. degree, Stephanie is a certified public accountant in the Commonwealth of Pennsylvania and previously worked as a manager of state and local tax controversy at a Fortune 100 company. Stephanie concentrates her practice on a wide range of state and local tax matters, and during law school, she served as a staff editor of the Temple Law Review.
Joshua M. Sivin and Melanie L. Lee
ARTICLES
Pennsylvania BF&R Grants Refund to Steadfast Company!
By Mitchell A. Newmark
The Pennsylvania Board of Finance and Revenue determined that WaWa, Inc. was entitled to refunds of sales tax that it paid, for which amounts were attributable to purchases of software used in locations outside of Pennsylvania. Read More >>
New York State ALJ Rules on Taxation of a Nonresident’s Income from Restricted Stock Units and Dividends from Those Units
By Kara M. Kraman
At issue in Matter of Dale A. Adams was whether a nonresident taxpayer used the proper methodology to source income from the vesting of restricted stock units, and whether the dividend income earned from restricted stock units that had vested should be sourced to New York State. Read More >>
Nebraska Supreme Court Upholds Denial of Deduction for Section 965 Inclusion Income
By Irwin M. Slomka
The Nebraska Supreme Court has upheld the Nebraska Department of Revenue’s denial of a claimed dividends received deduction for a corporation’s Internal Revenue Code Section 965 inclusion income. Read More >>
Financial Institution Successfully Defends $13 Million in Research Credits
By Melanie L. Lee
The Commissioner of Revenue wrongly disallowed a taxpayer’s claim of research credits, incorrectly determining that financial institutions are not entitled to claim such credits under Massachusetts law. Read More >>
WHAT’S SHAKING: BLANK ROME STATE + LOCAL TAX ROUNDUP
We invite you to attend, listen, and learn as our experienced 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 >>
© 2024 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.