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Allocation/Apportionment

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Washington DOR Responds to the LendingTree Decision: Benefit of the Service May Still Occur at the Customer’s Customer Location

by and 4 Mins Read

On July 21, the Washington Department of Revenue (“DOR”) issued its analysis of the Court of Appeals’ decision from March 30, 2020, in LendingTree, LLC v. Dep’t of Revenue, no. 80637-8-I (Wash. App. Ct. Mar. 30, 2020).  As set forth in the analysis, from the DOR’s perspective, the LendingTree court followed the existing Washington Business and Occupation tax (“B&O”) attribution rules and guidance and did not create a new interpretive legal framework.[1]  Although the DOR lost the case, and the court held that LendingTree’s receipts could not be sourced based where its customers’ customers were located, the DOR’s response suggests that they are factually distinguishing the case and will continue to attribute receipts to the customer’s customer location if that is where it determines the benefit of the services occurs.

Coronavirus Relief Bill Attempts to Address SALT Matters for Telecommuting Employees

by and 3 Mins Read

On Monday, July 27, the Senate Finance Committee released draft legislative provisions (“COVID-19 Bill”) regarding the next iteration of Coronavirus relief.  Somewhat surprisingly, the provisions include the Remote and Mobile Worker Relief Act of 2020, which was introduced earlier this year as S. 3995 by Sens. Sherrod Brown (D-OH) and Jon Thune (R-SD). S. 3995 appears to be based on S. 604, the Mobile Workforce State Income Tax Simplification Act (“Mobile Workforce Act”), which was…

To Market We Go Again: Pennsylvania Commonwealth Court Defers to Department, Disregards Law Change, and Holds that Cost of Performance Sourcing was Always Market

by , and 11 Mins Read

On Friday, July 24, 2020, the Commonwealth Court of Pennsylvania issued its decision and order on the Pennsylvania Department of Revenue’s motion to intervene in the highly-anticipated case of Synthes USA HQ, Inc. v. Commonwealth of Pennsylvania, No. 108 F.R. 2016.  The Synthes case is noteworthy not only because the Commonwealth Court addresses, for the first time, the Department of Revenue’s hotly debated interpretation of the state’s former “costs of performance” statute, but also because…

Idaho’s Supreme Court Means Business, Handing Taxpayers a Win on Definition of “Business Income”

by , and 7 Mins Read

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.

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