On June 29, 2017, the Delaware Governor signed a technical correction bill (“SB 79”) to the State’s unclaimed property overhaul legislation (“SB 13”), after SB 79 unanimously passed the Delaware House of Representatives and the Delaware Senate. To briefly recap, Delaware enacted SB 13 on February 2, 2017 in an effort to reform its widely-criticized unclaimed property laws. Some of the more beneficial changes in SB 13 included a reduced audit look-back period of 10 report years, and the ability for certain holders currently under audit to elect to convert the existing audit into a voluntary disclosure agreement or to elect an expedited audit option — both of which would result in the waiver of penalties and interest.
Major reform is coming to the way California administers its tax laws. On June 27, 2017, the Taxpayer Transparency and Fairness Act of 2017 (A.B. 102 or the “Act”), was signed into law by Governor Jerry Brown after passing both the California Senate and Assembly with little resistance. The Act fundamentally alters the administration of California’s tax laws by divesting the California State Board of Equalization (“Board”) of several of its key functions and assigning them to two new government agencies established by the Act: (1) the California Department of Tax and Fee Administration (“Tax Department”); and (2) the Office of Tax Appeals.
A Colorado district court held that Target Brands, Inc. (“TBI”), a subsidiary intangible holding company of Target Corporation (“Target”), had economic nexus with Colorado but the Department of Revenue (the “Department”) failed to use a reasonable alternative apportionment method when it assessed nearly $20 million in state corporate income tax for tax years 1999 through 2009 (the “Tax Years at Issue”). The case, Target Brands Inc. v. Department of Revenue, 2015CV33831, decided by the District Court of the City and County of Denver on January 27, 2017, highlights yet another example of aggressive economic nexus and alterative apportionment arguments of state revenue agencies to expand their revenue base by capturing income from out-of-state intangible holding companies.
The 2016 Cubs’ World Series win finally put to rest the long standing “Wait ’Til Next Year” slogan. However, the slogan may be resurrected in connection with Illinois’s state budget. For nearly two years, the Illinois legislature has failed to pass a comprehensive annual budget. Last year, on June 30, 2016, the ongoing partisan divide resulted in Illinois Governor Bruce Rauner signing a last-minute, stopgap budget to fund critical state operations for the remainder of 2016. With just over a month remaining in the 2017 legislative session, there appears to be little traction on any significant tax reform. That said, a number of bills have sparked widespread attention in the Illinois taxpayer community over the past few months and potentially may foreshadow significant tax reform in the coming years.