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California Data Extraction Bill Advances in the Senate

By and 3 Mins Read

The California legislature is proposing a 7.25% tax on “data extraction transactions in the state” through Senate Bill (“SB”) 1327. If enacted, the bill would target businesses that monetize data extracted from users (e.g., social media companies, large search engines, online retailers, etc.). “Data extraction transaction” means: “(A) A taxpayer sells user information or access to users to advertisers” and“(B) The taxpayer engages in a barter by providing services to a user in full or partial…

Governor Hochul Vetoes Expanded False Claims Act Legislation

By 3 Mins Read

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…

“Primary Function” Test Limits the Scope of Information Services for New York Sales Tax Purposes

By 2 Mins Read

In Matter of LendingTree Inc., DTA No. 829714 (N.Y. Div. Tax App. ALJ Div. Dec. 9, 2021), a New York administrative law judge (“ALJ”) found that the matching of prospective borrowers with lenders was not a taxable information service. While certain components of the matching process may constitute taxable information services, the ALJ found that the “primary function” of the matching process was not a taxable information service. In New York, information services are…

Baker McKenzie Obtains False Claims Act Win: Instant Savings Not Subject to Sales Tax

By and 3 Mins Read

On Tuesday, the New York Supreme Court granted Baker McKenzie’s motion to dismiss the New York Attorney General’s (“AG”) complaint against B&H Foto and Electronics Corp. regarding a purported False Claims Act (“FCA”) violation. The AG incorrectly alleged that B&H made a false claim on its tax return when they did not collect sales tax on “instant savings,” a type of vendor funding where a manufacturer reduces B&H’s purchase price of a particular item based…

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