Last fall, when a Maryland County Circuit Court held that the Maryland Digital Ad Tax violated the dormant commerce clause, the supremacy clause, the Internet Tax Freedom Act, and the First Amendment of the U.S. Constitution, most of the tax world anticipated that the Maryland Comptroller would promptly appeal the ruling, which it did.
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What’s Next For Maryland’s Digital Advertising Tax?
Maryland’s controversial Digital Advertising Gross Revenues Tax (the “Digital Ad Tax”) recently shot back to the top of the headlines when Maryland Circuit Court Judge, Alison Asti, ruled from the bench that the tax is unconstitutional and violates the federal Internet Tax Freedom Act (“ITFA”). Judge Asti ruled in favor of Verizon and Comcast that…
Illinois DOR Proposes to Change Income Tax Liability for Businesses that Make Sales to Foreign Countries
The Illinois Department of Revenue (“IDOR” or “Department”) recently issued a Notice of Proposed Amendment to amend its Regulation (86 Ill. Admin. Code § 100.3200) governing the “throwback” and “throwout” apportionment provisions (the “Amendments”). 46 Ill. Reg. ___ (Apr. 15, 2022), at 5856. If adopted, the Amendments would change the Illinois income tax burden…
Sirius XM Prevails in Texas Supreme Court on Sourcing of Receipts from Satellite Signal
In a recently issued taxpayer-favorable opinion, the Texas Supreme Court overturned the court of appeals’ decision holding that the state’s performance-based sourcing statute for service receipts essentially looks to customer location. The Court, relying on the statute’s plain language, then affirmed the taxpayer’s methodology, which sourced its receipts to the location where the taxpayer’s performance…
Texas Supreme Court Rejects Texas Comptroller’s “Receipt-Producing, End-Product” Act Test for Sourcing Receipts from Services
By Montaye Sigmon & David Blum
On March 25, the Texas Supreme Court issued a highly-anticipated decision concerning the proper test to source receipts from services for purposes of Texas franchise tax. By statute, receipts from a “service performed in this state” must be sourced to Texas, as the first step in calculating the amount of franchise tax owed by a…
Louisiana Launches Unique State Transfer Pricing Initiative
By Stefi George
Joining Indiana and North Carolina, Louisiana last week became the third state to offer an alternative to the burdensome and expensive process of enduring a state transfer pricing audit.
The Louisiana Department of Revenue announced a short-term voluntary initiative (the “Louisiana Transfer Pricing Managed Audit Program”) for taxpayers to come forward to resolve intercompany state transfer…
Updated: Maryland’s Latest Attempt to Fix its Digital Ad Tax May Lead to More Litigation
By Stefi George
Shortly after the Maryland passed the country’s first “Digital Advertising Gross Revenues Tax”, H.B. 732, the Maryland Senate went to work attempting to fix a few known glitches in the law. Senate Bill 787, which passed the Maryland General Assembly on April 12, 2021, is now headed to the Governor’s desk for signature. If the…
Lights! Camera! Action! Shuttered Venue Operators Grants (SVOG) Takes Center Stage on April 8
On April 8, The Small Business Administration (SBA) finally opens its Shuttered Venue Operators Grant (SVOG) program, which was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, as part of the the Consolidated Appropriations Act, signed into law on December 27, 2020, and as amended by the American Rescue Plan…
Word Play: The Curious Case of Economic Nexus Legislation in Florida
In June 2018, the United States Supreme Court in Wayfair held that the physical presence of the taxpayer was no longer a prerequisite for imposition of a sales tax. In so doing, the Court blessed the concept of “economic nexus” for sales tax purposes. Since that landmark decision, many states seized the opportunity to raise…
What Will Come of Maryland’s Unique and Controversial Digital Advertising Tax?
By Stefi George & David Blum
On February 12, 2021, overriding the Governor’s veto, Maryland enacted a first-of-its-kind tax “Digital Advertising Gross Revenues Tax” that has already sent shockwaves through the industry. As widely anticipated, within one week of the enactment four trade associations representing industry leaders filed suit in Maryland federal court to attempt to overturn the tax.…