On June 28, 2016, a federal court gave a major victory to Temple-Inland Inc. in its dispute with Delaware, declaring some of the state’s most egregious unclaimed property audit practices to be unconstitutional executive action. The court found that the state, and its contract auditors, waited more than two decades to perform an audit, ignored the applicable statute of limitations, failed to notify the company that records needed to be kept beyond standard retention periods,…
In Lucent Technologies, Inc. v. State Board of Equalization, 193 Cal. Rptr. 3d 323 (Cal. Ct. App. October 8, 2015), cert. denied January 20, 2016, the California Court of Appeal held that software transferred in conjunction with the concurrent license to copy and use the software was not subject to California sales tax, despite the fact that the software was delivered via magnetic tapes and compact discs, i.e., a tangible medium. As discussed below, the Court of Appeal’s decision addresses the arguments presented by the California Board of Equalization (“Board”) and appears to provide alternative grounds for exemption: one related to bundled transactions of tangible and intangible property and the other related to intangible property transferred pursuant to a Technology Transfer Agreement (“TTA”). Both grounds favored Lucent Technologies, Inc. (“Lucent”).