Income Tax Archives

Finding the Market Through the Looking Glass: California Issues Sales Factor Sourcing Guidance

March 30, 2022 By Maria Eberle, Lindsay LaCava and Rob Galloway 3 Mins Read

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…

New York State Issues Personal Income Tax Sourcing Guidance for Nonresident Employees Telecommuting Due to COVID-19 Pandemic

October 28, 2020 By Maria Eberle, Lindsay LaCava, Mark Yopp, Nicole Ford, Dmitrii Gabrielov, Trevor Mauck and Michael Tedesco 7 Mins Read

The New York State Department of Taxation and Finance (“Department”) recently published guidance stating that a nonresident’s income will be sourced to New York State unless the nonresident’s remote work location meets the “bona fide employer office” exception to the “convenience of the employer test.” Specifically, the Department addressed a question in its FAQs regarding how to source income for Personal Income Tax purposes where a nonresident’s primary office is in New York, but the…

California Court of Appeal Holds That a Trust’s Entire California Source Income Is Subject to Tax

July 6, 2020 By Dmitrii Gabrielov 4 Mins Read

In the closely watched “Paula Trust” case, the California Court of Appeal, First Appellate District held that all of a trust’s California source income is subject to California income tax even though one of the trustees was a nonresident. Steuer v. Franchise Tax Board, No. A154691 (Cal. Ct. App. 1st Dist. June 29, 2020). The trust’s non-California source income would be apportionable. California imposes income tax on 100% of a trust’s income if all trustees…

State and Local Tax Responses to COVID-19: Corporate Income Tax and Sales and Use Tax Deadline Extensions [Updated May 3, 2020]

May 4, 2020 By Bobby Albaral, Ted Bots, Scott Brandman, Maria Eberle, Lindsay LaCava, Stephen Long, Mark Yopp, Nicole Ford, Dmitrii Gabrielov, Rob Galloway, Drew Hemmings, Jimmy Lucas, Trevor Mauck, Kelsey Muraoka and Michael Tedesco 2 Mins Read

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.