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Kelsey Muraoka

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As part of the growing trend of states seeking to tax digital activities and data, New York is considering yet another data tax proposal that would tax the collection of personal data for commercial purposes. This latest proposal—which is contained in Senate Bill 4959—would impose a new excise tax “on the collection of consumer data of individual New York consumers by commercial data collectors.” The tax would apply regardless of how the data is collected, whether by electronic or other means. Under the proposal, “consumer data” is “any information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked with a consumer, whether directly submitted to the commercial data collector by the consumer or derived from other sources,” and a “consumer” includes individuals who purchase goods or services from a commercial data collector and individuals who use the services of a commercial data collector, whether charged for those services or not. A “commercial data collector” is a “for-profit entity that: (i) collects, maintains, uses, processes, sells or shares consumer data in support of its business activities; and (ii) collects consumer data, other than consumer contact information, on more than one million individual New York consumers in a month within the calendar year.” The bill would add the tax to a new section 186-h, within Article 9 of the New York Tax Law.

The Idaho Supreme Court recently affirmed a District Court’s judgment that the gain from the sale of a 78.54% membership interest in a limited liability company did not constitute “business income” under Idaho Code section 63-3027.  In Noell Indus. Inc. v. Idaho State Tax Comm’n, Docket No. 46941 (Idaho 2020), the court determined that “this type of gain does not meet the definition of ‘business income’ under either the transactional test or functional test (including the unitary business test),” and was therefore not apportionable income.

Numerous states have provided tax relief in response to the COVID-19 outbreak, often in the form of tax filing and payment deadline extensions.  At this time, 41 states and Washington, D.C. have provided a corporate income tax filing and/or payment deadline extension.  Most recently, Florida extended its May 1, 2020 corporate income tax deadlines to August 3, 2020 for filing and June 1, 2020 for payment.  Since the payment deadline is sooner than the filing deadline, the Florida Department of Revenue advised corporate taxpayers to submit payments based on their best estimate of the tax that would be due with the return.  Some states have also extended income tax deadlines for partnerships and other business entities and many states have extended individual income tax deadlines.

Many employees continue to telecommute due to the COVID-19 outbreak.  As discussed in our previous blog post on state tax nexus and apportionment issues, out-of-state employers may need to consider whether a telecommuting employee’s activities could create nexus, exceed Public Law 86-272 protections, or impact the employer’s state income tax apportionment factor (particularly in states with a payroll factor or a sales factor where receipts are sourced based on cost of performance).