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.
New York lawmakers recently introduced two bills to expand the application of the New York State False Claims Act (“FCA”). The first intends to require the FCA to apply to non-filers, the second to remove the scienter element (i.e., no longer imposing a “knowing” requirement). Although both bills are retroactive and concerning, removing the scienter element should put all businesses on high alert as enforcement of the tax laws could now be in the hands…
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.