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Allocation/Apportionment

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On September 8, 2022, the Louisiana Board of Tax Appeals (“Board”) granted a taxpayer’s motion for summary judgment in a case involving whether the taxpayer qualified as a manufacturer for purposes of Louisiana’s apportionment provisions.  Cervey LLC, f/k/a New – Tech Computer Systems LLC v. Secretary of Department of Revenue, Louisiana, La. BTA Docket No. 12272D (Sept. 8, 2022). The taxpayer’s business consisted primarily of three types of software: (1) software for maintaining health records…

California’s long-anticipated market-based sourcing “guidance” is finally out. Legal Ruling No. 2022-01 provides the Franchise Tax Board’s take on how to find the market in certain business-to-business sales. Though the guidance emphasizes that a seller should look to where its direct customer receives the benefit of sales of services, it keeps with current market-based sourcing trends amongst states and directs taxpayers to source such receipts based on the location of the taxpayer’s customer’s customer. The…

Governor Hochul rang in the new year by vetoing a bill that expanded the New York State False Claims Act (“FCA”) to permit claims against non-filers. Specifically, on December 31, 2021, Governor Hochul vetoed Senate Bill S4730 (Assembly Bill A2543), explaining in Veto Message No. 83 that “the language in the bill is broader than impacting only non-filers, and would implicate more tax filing controversies to the False Claims Act than just non-filers. This would…

In an order released in July 2021, the Illinois Tax Tribunal denied a taxpayer’s motion for summary judgment in a “unitary business” case, finding that there were disputed issues of fact as to whether the taxpayer was engaged in a unitary business with a company that the taxpayer sold.  See Christopher v. Illinois Dep’t of Rev., 19 TT 131 (Ill. Tax Trib. Nov. 24, 2020, released July 2021).  The taxpayer, T. Christopher Holding Company (“Holding Company”), claimed that it was not unitary with Vogue International, LLC (“Operating Company”), and thus its gain from the sale of Operating Company could not be included in Holding Company’s Illinois business income under U.S. constitutional principles and Illinois law.  However, the Tribunal found that the Illinois Department of Revenue (“Department”) had presented sufficient evidence to establish a disputed issue of material fact that rendered summary judgment on this issue inappropriate.