| The SALT team at Sutherland has published another Pinch of SALT. This article addresses the recent increase in the use of state false claims statutesby private parties to bring tax actions on behalf of state governments.
False claims act (FCA) statutes allow private persons to bring civil actions against alleged wrongdoers on behalf of the government. FCAs and qui tam actions vary, but generally impose significant penalties for "knowingly" failing to comply with a state law.
To read the full article, please click here. |
| GEORGETOWN LAW SCHOOL OFFERS STATE & LOCAL TAX CERTIFICATE — DISTANCE-LEARNING OPTION
Beginning in Fall 2012, Georgetown University Law Center will make its Certificate in State and Local Taxation (SALT Certificate) available by distance learning to lawyers residing anywhere in the United States. Distance-learning students will participate in real-time in classes streamed live from Georgetown classrooms. Archived recordings will be available to students forced by work commitments to miss a live class.
Please click here for a description of Georgetown’s SALT curriculum and faculty. For information concerning admission to the SALT Certificate program, please click here. For lawyers intending to commence their SALT Certificate studies in Fall 2012 via distance learning, the deadline for completing their applications will be July 15, 2012.
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| TEI has submitted two letters to legislators in Alabama supporting bills that would establish an independent tax tribunal in Alabama. With Georgia passing legislation earlier this year creating an independent tax tribunal, Alabama now finds itself in the minority of states in the region without an impartial forum for appealing decisions of the state department of revenue.
Bruce Ely, of Bradley Arant Boult Cummings LLP in Birmingham, Alabama provided an update on the bills working their way through the Alabama legislature. To help push this important legislation through the legislative process, companies with operations in Alabama are strongly encouraged to contact their state legislators and local industry associations and chambers of commerce urging passage of the measure.
Update from Bruce Ely:
In order to keep the momentum going and because we’re running out of legislative meeting days (again), we convinced our friends on Senator Paul Sanford’s Job Creation Committee to hold their noses and vote in favor of his last minute substitute to Rep. DeMarco’s substitute to HB 105. It passed 6-0 this afternoon (May 2, 2012), but with several members pointing out that amendments need to be made. Even Sanford admitted that his bill wasn’t perfect and he expects amendments.
For example (and you’ll love this), Sanford’s bill shifts the burden of proof on assessments AND appeals from the taxpayer to the ADOR, even if the ADOR won at the lower level. Several of us tried to talk him out of that one, but he refused. But he also listened to Commissioner Magee, since his bill repeals the ATAC judge nominating committee (her major source of heartburn), shortens the number of years of required SALT experience to only FIVE, and makes the judge stand for re-nomination and confirmation every 6 years, ala’ our circuit court judges.
There are 8-9 other changes he proposes but we are now reasonably confident that we can strip most if not all of them out, either on the Senate floor or in conference committee.
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| From the SALT team at Sutherland:
The controversial methodology relied upon by several states to assess corporate taxpayers for transfer pricing violations has been ruled invalid by a D.C. Administrative Law Judge (ALJ). Microsoft Corporation, Inc. v. Office of Tax and Revenue, D.C. Office of Administrative Hearings, Case No.: 2010-OTR-00012(May 1, 2012). Specifically, the Judge found the methodology “useless” for purposes of determining whether the Taxpayer complied with the arm’s-length standard for the pricing of intercompany transactions embodied in IRC § 482. Several revenue authorities, including New Jersey, Alabama, Louisiana, Kentucky and the District of Columbia, have relied on this now invalidated transfer pricing audit methodology to assess corporate franchise and income tax.
Please click here to read the full release on this exciting development. |
| From the SALT team at Sutherland:
Iowa and Kansas recently issued rulings regarding the taxability of cloud-based software applications and online training services. While the conclusions reached by both states—that the services are not taxable—are generally the same, the reasoning relied upon by each department of revenue illustrates the ongoing uncertainty of applying state sales and use tax laws to cloud computing services.
Click here to read the full post on the Sutherland SALT Online blog. |
| From the FTA:
The Federation of Tax Administrators Annual Meeting is one-stop shopping for discovering the must-know trends in tax policy and law, for learning how to run operations more efficiently, for tips on how to deliver better services in today's budget-starved environment, and for sharing ideas on improving compliance programs.
The event is geared toward senior management state tax administrators and private sector representatives with an interest in the policy, program or technology aspects of state tax administration. If your world is "all state tax, all the time," make plans to be in Washington, D.C. on June 17-20.
Ideas, networking, trends to embrace, pitfalls to avoid: all included in the conference fee.
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| From the NPR Planet Money Blog (click here for the post on their website):
At the beginning of the call, the automated voice warned me that the estimated wait time was 238 minutes. At first I thought that was a mistake. It wasn't. After over 3 hours on hold, I just gave up. (I have to go do an interview.)
Yes, I was crazy to call the state tax office the day before tax day. But I accidentally entered the wrong bank account number when I filed electronically. Not my brightest move.
Maybe I'll call back early tomorrow morning.
Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/. |
| From the SALT folks at PwC:
On March 29, 2012, a Virginia Circuit Court concluded that the related-party addback exception requiring licensors to derive at least one-third of their gross revenues from the licensing of intangible property to unrelated members does not mandate that the royalty income be derived directly from unrelated members. The fact that the licensor received the revenue from a related-party conduit does not disqualify the licensor from the exception.
Please click here to read the full release. |
| The FTA recently highlighted some of the great work being done by state departments of revenue around the country by handing out a number of awards. They included FTA awards for the Maryland Comptroller's Office (for its leadership training program), the Washington Department of Revenue (for the administration of its recent amnesty program), and the Wisconsin Department of Revenue (for its online portal account). Other award recipients included California's Franchise Tax Board for its outreach via YouTube videos, and Connecticut's development of "rolling reorganization" employed to assist with downsizing and avoiding the loss of institutional knowledge with the retirement of long-time members of the department.
Please click here for more details on these and other award winning departments of revenue. Congratulations! |
| From the SALT team at KPMG:
A Virginia circuit court recently addressed whether a corporate taxpayer qualified for an exception to Virginia’s related party addback rules.... The issue before the court was whether the exception applied when the related member receiving the income did not directly license intangibles to third parties, but indirectly derived at least onethird of its gross revenue from licensing of intangible property to unrelated parties. In other words, because Wendy’s licensed the intangible property to unrelated parties and ultimately paid a portion of these royalties to the holding company, it asserted that the transactions with the unrelated parties counted in determining if the holding company met the one-third test. The court, based on the plain language of the statute, agreed. In its view, the use of the term “derives” in the statute did not infer that the related member must engage in direct licensing in order to qualify for the exception. As such, the court held that no direct connection between the related member and
the unrelated licensee is required.
Please click here to read the full alert. |
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