Monday, December 5, 2022

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Leading the News

California Poised for Oil Probe as Newsom Scorns ‘Price Gouging’

California’s Legislature is set to meet Monday to kick off the 2023 session officially and set the stage for an investigation of oil industry profits. Read More

US States, City Sector Outlook to Weaken as Economy Slows: Fitch

Fitch Ratings expects a “deteriorating” outlook for US states and local governments next year due to a slowing economy, according to the company’s 2023 outlook report. Read More

PwC to Quicken US Partner Hiring by Targeting Rival EY, FT Says

PricewaterhouseCoopers LLP plans to quadruple the pace of partner hiring in the US as it tries to poach senior executives from rival EY, the Financial Times reported. Read More

Legal News

Wells Fargo Rail Can Reroute Michigan Tax Case to Right Court

Wells Fargo Rail Corp. challenged a denial of tax credits in the wrong court due to a “preexisting jumble” of conflicting statutes, the Michigan Court of Appeals ruled. Read More|Documents Attached

More Legal News

To help you stay on top of SALT litigation in courts across the country, here are additional opinions you might find interesting. Send your thoughts to our litigation reporter, Perry Cooper, at pcooper@bloombergindustry.com, or follow her on Twitter @PerryECooper.

Rodriguez v. Dep’t of Revenue, S.C. Admin. Law Ct.: ordering agency to consider income tax returns that couple filed late after realizing their tax preparer filed their federal but not state returns
Republic Nat’l Distrib. Co. v. Foster, La. Bd. Tax App.: agreeing with alcohol wholesaler that New Orleans can’t impose the city gallonage tax because company had no physical office or business location in town

States Defend Tax-Sale Practices Before SCOTUS

A joint brief by the Nebraska attorney general and a third party was filed at the US Supreme Court late Friday defending a state law allowing governments to keep the surplus proceeds after a delinquent tax bill is paid off—an excess that could be hundreds of thousands of dollars—when the property is sold through a tax sale.

Responses from government officials in similar cases against Nebraska and Minnesota officials are due early this week.

The Pacific Legal Foundation, backed by a wide array of other outside groups, filed the three petitions asking the US Supreme Court to take up the issue. They argue that the tax sale actions amount to unconstitutional takings without compensation. Officials in all the cases tried to waive the right to respond, but the court ordered them to give their side—meaning that at least one justice is interested in taking up the cases.

Cannabis Industry Tax Penalty Gets Attention From More States

The week in state tax news: A growing number of states are decoupling from a federal rule that imposes a tax penalty on legitimate cannabis companies by barring them from claiming business deductions for their operations. Meanwhile, Ohio is the latest state to find streaming entertainment services aren’t liable for local franchise fees. And Illinois is sweetening its tax incentives for electric vehicle manufacturers.

Read More

EY Leaves Key Issues of Split Undecided as 2023 Vote Approaches

EY is moving closer to a vote on splitting up the firm, but not without figuring out first some pivotal issues.

Those details, according to people familiar with Ernst & Young’s deliberations, include how to divvy up tax partners between the advisory business and audit practice, how to structure any stock-based compensation for advisory staff, and naming leaders to run the newly decoupled businesses.

EY leaders expect that about 75 of its 140 affiliates will consider sometime in early 2023 whether to support splitting apart the global firm, the people said—a shorter window than the firm had predicted back in September when EY leaders announced they would seek partners’ approval beginning this year.

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Insights

Perspectives From Tax Practitioners and Other Thought Leaders

What Could Be Next for Syndicated Conservation Easements?

By Sarah Adkisson of EisnerAmper

Conservation easement provisions included in the EARN Act were added as revenue offsets for some popular provisions, and with the death of Notice 2017-10, the IRS likely will push Congress for this legislative fix to address syndicated easements issues, says Corvee’s Sarah Adkisson. Read More|Document Attached

Week in Insights: Scoring the Goals That Really Matter

This week, our experts touched on a wide range of topics, from transfer pricing in cannabis to tax-loss harvesting. For a look at what’s making news, here’s our roundup. Read More

Spotlight on Ernst & Young Americas' Vice Chair of Tax Kevin Flynn

This week’s Spotlight is on Kevin Flynn, Ernst & Young’s vice chair of tax for the Americas, based in San Francisco.

Flynn, who has been at the firm for 36 years, oversees more than 20,000 tax professionals who provide services to clients in North, Central, and South America, as well as in Israel.

Outside of the office, you might find Flynn watching “Ted Lasso” (when the new season airs), enjoying a steak off the grill, or dreaming about being a professional water skier.

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Developments

Alabama DOR Adopts Sales and Use Tax Regulation on Sales to Motor Freight Lines

The Alabama Department of Revenue Nov. 30 adopted a sales and use tax regulation on the sale of property to motor freight lines. The rule includes measures: 1) creating a ... Read More|Documents Attached

Alabama DOR Amends Income Tax Regulation on Small Business Health Insurance Premium Deductions

The Alabama Department of Revenue Nov. 30 amended a regulation on the deduction percentage for small business health insurance premiums, for individual income and corporate income tax purposes. The rule ... Read More|Documents Attached

Alabama DOR Repeals Duplicative Regulation on Sales and Use Tax Liability for Motor Freight Lines

The Alabama Department of Revenue Nov. 30 repealed a regulation on the sales and use tax liability for motor freight lines due to its duplicative nature. The rule includes a ... Read More|Documents Attached

Arizona DOR Issues Guidance on Renewing Transaction Privilege Tax License

The Arizona Department of Revenue (DOR) Dec. 1 issued guidance on renewing a transaction privilege tax (TPT) license. The license renewals are due Jan. 1, 2023, and penalties will be ... Read More|Document Attached

Arkansas Finance Department Sustains Tax Assessment on Taxpayer’s Landscaping Services, Withhold Wage Tax

The Arkansas Department of Finance and Administration (DFA) Nov. 30 sustained in a letter ruling sales and use and corporate income tax, penalty, and interest on Taxpayer’s landscaping services. Taxpayer ... Read More|Document Attached

Colorado DOR Seeks Comments on Proposed Regulation Concerning Health Care Preceptor Income Tax Credit

The Colorado Department of Revenue Dec. 1 issued a request for public input on a proposed draft of a regulation concerning the Colorado rural primary health care preceptor credit for ... Read More|Documents Attached

Delaware Treasurer Announces New Individual Income Tax Deduction for Contributions Made to Savings Plans

The Delaware State Treasurer Dec. 1 announced a new individual income tax deduction for contributions to savings plans. The announcement includes that: 1) state residents will be entitled to the ... Read More|Document Attached

Florida Circuit Court Abates Corporate Income Tax Assessment Against Target Corporation Subsidiary

The Florida Circuit Court Nov. 28 found Taxpayer, a Minnesota-based Target Corporation subsidiary, established that none of the receipts from the sale of its services to Target were Florida sales ... Read More|Document Attached

Georgia DOR Issues Bulletin on Prepaid Local Motor Fuel Sales Tax, Effective Jan. 1, 2023

The Georgia Department of Revenue Dec. 1 issued a bulletin on prepaid local sales and use tax on motor fuel sales, effective Jan. 1, 2023. The tax is calculated based ... Read More|Document Attached

Illinois DOR Announces 2022 Tentative Property Tax Multiplier for Tazewell County

The Illinois Department of Revenue Dec. 1 announced a tentative property assessment equalization factor (the “multiplier”) for Tazewell County, for property tax purposes. The announcement includes: 1) the tentative equalization ... Read More|Document Attached

Maryland Comptroller Publishes 2023 Withholding Tax Facts on Filing Withholding Forms, Reconciliation Statements

The Maryland Comptroller Dec. 1 published withholding tax facts for 2023, which provide information to employers on filing withholding-related forms and reconciliation statements for corporate income and individual income tax ... Read More|Document Attached

Maryland SDAT Amends Regulations on Personal Property Assessments, Business Organizations, Franchise Tax Payments

The Maryland Department of Assessments and Taxation (SDAT) Dec. 2 amended regulations on personal property tax assessments, business organizations, and corporate income tax payments. The rules include measures: 1) removing ... Read More|Documents Attached

Michigan Treasury Issues Notice of Prepaid Sales Tax Rates on Fuel for January 2023

The Michigan Department of Treasury Dec. 1 issued a notice of prepaid sales tax rates on fuel in effect for the month of January 2023, for sales and use tax ... Read More|Document Attached

Michigan Treasury Issues Tax Rates for Motor Fuel, Alternative Fuel

The Michigan Department of Treasury Dec. 1 published the excise tax rates for fuels purchased on or after Jan. 1, 2023. The tax rate for gasoline, diesel fuel, and alternative ... Read More|Document Attached

Missouri DOR Determines Items Sold by Religious Owned Thrift Stores Not Subject to Sales Tax

The Missouri Department of Revenue (DOR) Nov. 23 determined in a letter ruling that items sold by Taxpayer’s religious owned thrift stores weren’t subject to sales and use tax. Taxpayer, ... Read More|Document Attached

Missouri DOR Determines Out-of-State Vendor Must Collect Sales Tax on Orders Drop Shipped in State

The Missouri Department of Revenue (DOR) Nov. 2 determined in a letter ruling that sales and use tax applies to third-party drop shipments to state customers arranged by Taxpayer, an ... Read More|Document Attached

Missouri DOR Determines Sales and Use Taxability of Utilities Purchased by Hotel

The Missouri Department of Revenue (DOR) Nov. 23 determined in a letter ruling the sales and use taxability of utilities purchased by a hotel. Taxpayer, a utility company that provided ... Read More|Document Attached

Missouri DOR Determines Taxpayer’s Liability for Collecting Sales and Use Tax as Vendor

The Missouri Department of Revenue Nov. 2 determined in a letter ruling Taxpayer’s liability for collecting sales and use tax as a vendor. Taxpayer was a Texas-based company that leased ... Read More|Document Attached

Montana DOR Announces Credit for Income Taxes Paid to Another State, Country by Pass-Through Entities

The Montana Department of Revenue Dec. 1 announced that residents who are owners of a pass-through entity (PTE) that paid income taxes in another state may be eligible for a ... Read More|Document Attached

Montana DOR Issues Information on Income Tax Credit for PTE’s Taxes Paid to Another State

The Montana Department of Revenue Dec. 1 issued information on the credit available to residents who are owners of a pass-through entity (PTE) that paid taxes to another state, for ... Read More|Document Attached

Nebraska DOR Issues Information Guide on Computer Reporting Procedure for Forms 1099, 21CM

The Nebraska Department of Revenue (DOR) Dec. 1 issued an information guide on the computer reporting procedures for Forms 1099, 21CM. Employers and payors licensed for Nebraska income tax withholding ... Read More|Document Attached

Nebraska DOR Publishes Information Guide on Computer Reporting Procedure for Income Tax Withholding W-2 Forms

The Nebraska Department of Revenue Dec. 1 published a revised information guide on the computer reporting procedure for individual income and corporate income tax withholding W-2 forms. The guide includes ... Read More|Document Attached

Nevada Tax Department Releases Form for Renewal of Tobacco Licenses Expiring on Dec. 31

The Nevada Department of Taxation Dec. 1 released an excise tax form for the renewal of tobacco licenses expiring on Dec. 31. All licenses are renewable by Jan. 1 of ... Read More|Document Attached

New Jersey: U.S. District Court Dismisses Energy Transfer L.P.'s Lawsuit Challenging Partnership Fee Collection Regime

The U.S. District Court for the New Jersey District Nov. 29 dismissed a constitutional challenge to parts of the state’s partnership tax collection regime, for corporate income tax purposes. Under ... Read More|Document Attached

New York Tax and Finance Department Issues Technical Memorandum on MTA Surcharge, Franchise Tax Threshold

The New York Department of Taxation and Finance Dec. 1 issued a technical memorandum on the Metropolitan Transportation Authority (MTA) surcharge rate and deriving receipts thresholds for 2023 for corporate ... Read More|Document Attached

New York: New York City Finance Department Issues Notice on Income, Excise Tax Overpayment, Underpayment Interest Rates

The New York City Department of Finance Dec. 1 issued a notice on the interest rates applicable to overpayments and underpayments of taxes for the period beginning Jan. 1, 2023, ... Read More|Document Attached

North Carolina DOR Announces Tax Assessment, Overpayment Interest Rate at 7 Percent for Various Taxes

The North Carolina Department of Revenue Dec. 1 announced that it has set the interest rate at 7 percent for the period of Jan. 1, 2023, through June 30, 2023, ... Read More|Document Attached

Ohio Appeals Board Reverses Summit County BOR’s Valuation of Property, Reinstates Fiscal Officer’s Values

The Ohio Board of Tax Appeals (BTA) Dec. 1 reversed the Summit County Board of Revision’s (BOR) property tax valuation of Taxpayer’s property. The Woodridge Local Schools Board of Education ... Read More|Document Attached

Ohio Supreme Court Finds Netflix, Hulu Weren’t Video Service Providers Liable to Pay Franchise Fees

The Ohio Supreme Court Nov. 30 found that Netflix, Inc. and Hulu, LLC (Taxpayers) weren’t video service providers liable for a city’s franchise fees under the Fair Competition in Cable ... Read More|Document Attached

Oregon Tax Court Finds Marijuana Growers Entitled to Income Tax Subtractions for Business Expenses

The Oregon Tax Court Nov. 29 found that Taxpayers, marijuana growers, were entitled to claim subtractions from gross income for various business expenses, such as depreciation on air conditioners, office ... Read More|Document Attached

Pennsylvania DOR Announces 2023 Mass Transit Returns, Tax Periods, Administrative Due Dates

The Pennsylvania Department of Revenue Sept. 1 announced the 2023 public transportation assistance (PTA) fund taxes and vehicle rental tax (VRT) returns, periods, payment information, and due dates for excise ... Read More|Document Attached

Pennsylvania DOR Issues 2023 Small Games of Chance Administrative Due Dates

The Pennsylvania Department of Revenue (DOR) Sept. 1 published the 2023 small games of chance and tavern tax administrative due dates for excise tax purposes. The publication includes information on: ... Read More|Document Attached

Pennsylvania DOR Publishes 2023 Cigarette Tax Payment, Other Tobacco Products Administrative Due Dates

The Pennsylvania Department of Revenue (DOR) Sept. 1 published the 2023 cigarette tax and other tobacco products administrative due dates, for excise tax purposes. The due dates are for: 1) ... Read More|Document Attached

Pennsylvania DOR Publishes 2023 Cigarette, Other Tobacco Product Excise Tax Payment, Reporting Due Dates

The Pennsylvania Department of Revenue Sept. 1 published the 2023 cigarette and other tobacco product tax payment and reporting due dates for excise tax purposes. The due dates are for ... Read More|Document Attached

Pennsylvania DOR Publishes 2023 Malt Beverage Tax Payment, Report Due Dates

The Pennsylvania Department of Revenue (DOR) Sept. 1 published the 2023 monthly malt beverage tax payment and report due dates for manufacturers and importing distributors, for excise tax purposes. The ... Read More|Document Attached

Pennsylvania DOR Publishes 2023 Medical Marijuana Gross Receipts Tax Due Dates

The Pennsylvania Department of Revenue (DOR) Sept. 1 published the 2023 medical marijuana gross receipts tax due dates for quarterly filers, for excise tax purposes. The due dates are: 1) ... Read More|Document Attached

Pennsylvania DOR Publishes 2023 Pari-Mutuel Wagering Tax Return, Excise Tax Payment Due Dates

The Pennsylvania Department of Revenue (DOR) Sept. 1 published the 2023 pari-mutuel wagering tax return and payment due dates for excise tax purposes. The publication includes the monthly filing and ... Read More|Document Attached

Pennsylvania DOR Publishes 2023 Sales and Use, Hotel Occupancy Tax Returns, Tax Periods, Due Dates

The Pennsylvania Department of Revenue (DOR) Sept. 1 published the 2023 tax returns, tax periods, and administrative due dates for sales and use and hotel occupancy taxes. The publication includes ... Read More|Document Attached

Pennsylvania DOR Publishes 2023 Withholding Tax Filing, Remittance Due Dates

The Pennsylvania Department of Revenue (DOR) Sept. 1 published 2023 withholding tax filing and remittance due dates for employers, Forms W-2 and 1099, for individual income and corporate income tax ... Read More|Document Attached

Rhode Island Tax Div. Finds Taxpayer Owes Additional Income Tax, Interest, Penalty for Unreported Income

The Rhode Island Division of Taxation (Tax Div.) Nov. 14 found Taxpayer owed additional individual income tax, interest, and penalty for unreported income. After comparing Taxpayer’s federal returns with the ... Read More|Document Attached

South Carolina Issues Revenue Ruling Concerning Partial Property Tax Exemption for Manufacturing Property

The South Carolina Department of Revenue (DOR) Nov. 30 issued a revenue ruling updating a prior ruling to reflect changes made by the state legislature to the partial property tax ... Read More|Document Attached

South Dakota DOR Announces New General Sales and Use Tax Rate for Town of Cresbard

The South Dakota Department of Revenue Dec. 1 announced a new municipal sales and use tax rate of 2 percent for the town of Cresbard, beginning Jan. 1, 2023. The ... Read More|Document Attached

Texas Comptroller Affirms Mixed Beverage Gross Receipts Tax, Sales Tax, Penalty Assessed Against Bar Operator

The Texas Comptroller of Public Accounts Nov. 4 adopted an Administrative Law Judge’s (ALJ) recommendation to affirm excise and sales and use tax assessments. Taxpayer held a mixed beverage permit ... Read More|Document Attached

Texas Comptroller Affirms Sales and Use, Excise Tax Assessments Against Live-Entertainment Club Operator

The Texas Comptroller of Public Accounts Oct. 18 adopted an Administrative Law Judge’s (ALJ) recommendation to affirm Taxpayer’s sales and use and excise tax assessments. Taxpayer operated a live-entertainment club. ... Read More|Document Attached

Texas Comptroller Finds Taxpayer’s Purchases Weren’t Sales Tax Exempt, Affirms Tax Division’s Partial Refund Denial

The Texas Comptroller of Public Accounts Oct. 31 adopted an Administrative Law Judge’s (ALJ) recommendation to uphold the Tax Division’s (staff) partial denial of Taxpayer’s sales and use tax refund ... Read More|Document Attached

Utah Tax Commission Announces Changes to Sales, Excise Tax Rates Effective Jan. 1, 2023

The Utah State Tax Commission Dec. 1 announced changes to sales and use and excise tax rates, effective Jan. 1, 2023. The announcement includes that: 1) Millcreek City imposes a ... Read More|Document Attached

Utah Tax Commission Publishes Combined Sales, Excise Tax Rates Effective Jan. 1 , 2023

The Utah State Tax Commission Dec. 1 published the combined sales and use tax rates that are subject to the Streamlined Sales Tax Rules, effective Jan. 1, 2023. The publication ... Read More|Document Attached

Utah Tax Commission Publishes Updated Excise Tax Cigarette Directory

The Utah State Tax Commission Dec. 1 published an updated Utah Cigarette Directory, for excise tax purposes. The directory currently lists approved cigarette and roll-your-own (RYO) brands and manufacturers. Future ... Read More|Document Attached

Virginia Tax Department Issues Bulletin on New Localities Adopting Disposable Plastic Bag Tax

The Virginia Department of Taxation Dec. 1 issued a bulletin providing that Albemarle County and the cities of Charlottesville and Fairfax have adopted the disposable plastic bag tax, effective Jan. ... Read More|Document Attached

Washington DOR Denies Sales and Use Tax Refund to Taxpayer on Purchase of Electric Vehicle

The Washington Department of Revenue (DOR) Administrative Review and Hearings Division Nov. 30 denied Taxpayer’s petition for a refund of retail sales and use tax paid to an out-of-state seller ... Read More|Document Attached

Washington DOR Issues Information on REET Exemption for Real Property Transfers Used for Low-Income Housing

The Washington Department of Revenue Dec. 1 issued a special notice providing information on a real estate excise tax (REET) exemption for transfers of real property to be used for ... Read More|Document Attached

Washington DOR Issues Special B&O Tax Notice on Equitable Access to Credit Program Contributions

The Washington Department of Revenue (DOR) Dec. 1 issued a special notice for community development financial institutions such as community development banks, credit unions, and venture capital funds on the ... Read More|Document Attached

Washington DOR Issues Special Notice on B&O Tax Credit Increase for Small Businesses

The Washington Department of Revenue (DOR) Dec. 1 issued a special notice on the Business and Occupation (B&O) tax credit increase for small businesses, for excise tax purposes. The information ... Read More|Document Attached

West Virginia Tax Department Issues Notice on 2023 Adjusted Interest Rates on Tax Underpayments, Overpayments

The West Virginia State Tax Department Dec. 1 announced the adjusted interest rates on tax underpayments and overpayments and on public contracts for the period of Jan. 1, 2023, through ... Read More|Document Attached

Wisconsin DOR Announces Updated Equated Manufacturing Rolls, Statements of Property Tax Assessment, Aggregate Ratios Summary

The Wisconsin Department of Revenue (DOR) Dec. 1 announced that it updated the equated manufacturing rolls, the final statements of assessment (SOA), and the summary of aggregate ratios, for property ... Read More|Document Attached

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