The Supreme Court decided only one significant state tax case in its recently ended term, a decision that is important for tax policy reasons, for taxpayers, and for state and local governments.
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Topics
State & Local Tax (SALT)
State Taxation of Trusts: Credit for Taxes Paid to Other States
The state income taxation of trusts and estates has become an increasingly complicated and challenging task for trustees and their tax advisers.
Federal Law Preempts Alabama Statute Denying Tax Deduction for Illegal Alien Employees
The Eleventh Circuit held that an Alabama law that disallowed an employer a state tax deduction for wages and compensation paid to an alien unauthorized to work in the United States was preempted by federal immigration law.
Corporation Cannot Deduct California Business Privilege Tax in Year Paid
An accrual-basis taxpayer could not deduct the California business privilege tax in the year it was paid, even though California treated the tax as being incurred in that year.
Federal Income Tax Treatment of Certain Transferable State Tax Credits
The emergence of online marketplaces and auction houses has provided a single point of contact for both sellers and buyers, making sales and purchases of transferable state tax credits more common.
Combined Reporting Creates Compliance Challenges
An increasing number of states have enacted or proposed combined reporting requirements for related entities involved in a unitary business, creating increased compliance burdens for taxpayers and administrative challenges for state tax agencies.
Sales Tax Audit Best Practices
This article discusses common issues in state sales tax audits and gives tips and best practices for each part of an audit life cycle.
Illinois “Click-Through Nexus” Law Held Unconstitutional
The Circuit Court for Cook County in Illinois declared Illinois’s “click-through nexus” law unconstitutional.
Refusal to Refund Sewer Assessments Is Not Equal Protection Violation, Supreme Court Holds
The Supreme Court held that Indianapolis’s refusal to refund sewer assessments paid in a lump sum by residents to fund a sewer project did not violate the Equal Protection Clause of the U.S. Constitution.
Multistate Partnerships: To Withhold, or Not to Withhold?
The varying rules for withholding can create a compliance nightmare for multistate partnerships with a large number of partners.
Colorado Notice and Reporting Requirements Declared Unconstitutional
A district court held that a law, which imposed notice and reporting requirements on retailers that do not collect and remit sales tax on sales to Colorado customers, was unconstitutional because it violated the Commerce Clause.
Illinois “Click-Through Nexus” Law Held Unconstitutional
The Circuit Court for Cook County in Illinois issued an eagerly awaited order explaining its bench decision on April 25, which declared Illinois’s “click-through nexus” law unconstitutional.
Colorado’s “Amazon” Law Requiring Out-of-State Retailers to Report Sales Held to Be Unconstitutional
A federal district court held that the Colorado law requiring out-of state retailers to report information about customers’ purchases to each customer and to the state is unconstitutional.
Ethical Considerations in Reporting Use Taxes on State Income Tax Returns
As more states allow residents to report a liability for state use taxes on their individual income tax returns, practitioners will have to explain to clients their obligations in reporting use tax liability and address the professional standards for reporting use tax on a state income tax return.
The Evolution of Sales Tax Nexus Expansion Laws
Over the past three years, several states have expanded the activities that create sales tax nexus for out-of-state retailers without a physical presence in the state.
Mail-Order Book Seller Has Nexus with State
The Tennessee Court of Appeals held that a corporation that sells books and other publications through the mail to students in schools and home-schooled students had substantial nexus with Tennessee because teachers and parents of the students purchasing the books and publications assisted in ordering and distributing them.
Different States’ Approaches on Sales Tax Treatment of “Deal of the Day” Instruments
Guidance on the sales tax treatment of prepaid discount vouchers or “deal of the day” certificates purchased on internet sites has been provided by several states recently, with more likely to follow soon.
States Battle for R&D Investment by Enhancing Tax Incentives
When evaluating the potential tax effect of research and development investments, taxpayers should be aware of the generous tax incentives offered by many states that can add to the benefit received for the federal R&D credit.
How Does One Tax a Cloud?
State revenue departments face perplexing questions when deciding whether (and how) to tax cloud computing.
Software and California Sales and Use Tax
This item addresses the sales and use tax implications of canned software (prewritten programs) under two recent California cases in light of that state’s current statutory scheme.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
