01 August 2017 State and Local Tax Weekly for July 21 Ernst & Young's State and Local Tax Weekly newsletter for July 21 is now available. Prepared by Ernst & Young's State and Local Taxation group, this weekly update summarizes important news, cases, and other developments in U.S. state and local taxation. Washington expands statutory nexus for sales/use and B&O tax purposes, repeals certain tax preferences — Governor vetoes B&O tax rate reduction for manufacturers On July 7, 2017, Governor Jay Inslee signed HB 2163 (Ch. 28, 2017 Wash. Laws 3rd Special Session), key provisions of which expand the state's sales and use tax nexus provisions to require marketplace facilitators to collect and remit tax or comply with notice and reporting requirements. The new law also expands the economic nexus provisions of Washington's business and occupation (B&O) tax to retailers, repeals tax preferences for bottled water and narrows the preference for self-produced fuel. In addition, Inslee vetoed in part SB 5977, specifically the provisions that would have reduced the B&O tax rate for manufacturers and provided sales and use tax exemptions to entities that convert coal-fired electric generation facilities to natural gas-fired generation plants or biomass energy facilities. Starting January 1, 2018, remote sellers, referrers and marketplace facilitators that meet the economic nexus threshold or have a physical presence in Washington must elect to either: (1) collect and remit Washington's retail sales or use tax on taxable sales into the state; or (2) comply with notice and reporting requirements. Until January 1, 2020, these requirements do not apply to retail sales of digital products and digital codes, other than: (a) specified digital products and digital games; and (b) digital codes used to redeem specified digital products and digital games, by a marketplace seller through a marketplace facilitator or directly resulting from a referral. The election requirements apply to remote sellers and marketplace facilitators who, in the current or immediately preceding calendar year, have gross receipts from retail sales sourced to Washington of at least $10,000. For referrers, the threshold amount, for the current or immediately preceding calendar year, is the business's gross income from the referrer's referral services apportioned to Washington and from retail sales sourced to the state of at least $267,000. Effective July 1, 2017, the law updates the economic nexus provisions for the B&O tax and expands them to include retailers. As originally enacted, and amended in 2015, the economic nexus provisions applied only to B&O taxes imposed on apportionable activities as defined in RCW 82.04.460 (e.g., generally businesses that sell services and other business activities, but not businesses that sell tangible personal property) and wholesalers. Under the revised provision, the economic nexus standard is expanded to apply to selling activity taxable under RCW 82.04.250(1) (e.g., retailers, except those taxed under other provisions of the B&O tax law). Retailers will be deemed to have substantial nexus if they have $267,000 of receipts from Washington customer or 25% of their total receipts in Washington. Effective August 1, 2017, the law: (1) repeals the sales and use tax exemption for bottled water (the exemption still applies to bottled water dispensed under a prescription for medical use, or to sales of bottled water to persons whose primary source of drinking water is unsafe); and (2) narrows the use tax exemption for self-produced fuel to only apply to biomass fuel (to qualify, the biomass fuel must be used by extractors or manufacturers directly in the operation of the particular extractive operation or manufacturing plant that produced or manufactured the same). For a more in-depth discussion on this development, see Tax Alert 2017-1149. Colorado: The Colorado Department of Revenue (Department) issued a private letter ruling permitting an affiliated group subject to several different apportionment methodologies (including those applicable to trucking, airlines, financial institutions, and general business activity) to calculate its combined income tax liability using the methodology outlined in Private Letter Rulings PLR-11-002 (financial and non-financial institutions file combined report) and PLR-15-005 (apportionment of combined report's income). The Department, however, advised affiliated groups that they will have to calculate their combined income tax liability using the methodology adopted in Rule 1 CCR 201-2, 39-22-303(11)(c), which is being amended to address how an affiliated group of corporations should apportion its income when group members use different apportionment methodologies, with respect to returns due after amendments to that rule are approved and take effect. Colo. Dept. of Rev., PLR-17-001 (April 27, 2017). Maine: New law (LD 390) repeals the voter approved 3% surcharge on the portion of an individual's Maine taxable income in excess of $200,000, applicable to tax years beginning on an after Jan. 1, 2017. Voters had approved a ballot initiative authorizing the income tax surcharge in the November 2016 election to support public kindergarten to grade 12 education funding. Me. Laws 2017, Ch. 284 (LD 390, §D-2 (repealing 36 MRSA §5111 sub-§6)), signed by the governor on July 4, 2017. New York City: A telecommunications provider is not a utility within the meaning of New York City's (NYC) Administrative Code but rather is a vendor of utility services and, therefore, is subject to both NYC's unincorporated business income tax (UBT) and utility tax. In reaching this conclusion, the New York Supreme Court Appellate Division (court) explained that in order to be a "utility" exempt from the UBT, the service provider must be subject to the supervision of the Public Service Commission (PSC); if it is not, then it is a vendor of utility service. The court citing Astoria Fed. Sav. & Loan Assn.1 and Cable & Wireless,2 found the telecommunications provider's admission that it is a "competitive entity" that does not enjoy monopoly status is evidence that it is subject to "light regulation" by the PSC and does not reach the level of "supervision" necessary to classify it as a utility. Rather, it is a vendor of utility services liable for both the utility tax and the UBT. Sprint Comm. Co., L.P. v. NYC Dept. of Fin., et al., 2017 NY Slip Op 05194 (NY Sup. Ct., App. Div. 1st Dept., June 27, 2017). Ohio: The U.S. Supreme Court has been asked to review the Ohio Supreme Court's ruling in T. Ryan Legg Irrevocable Trust that a trust's capital gains on the sale of shares in a pass-through entity constituted a "qualifying trust amount" that can properly be allocated in part to Ohio because the trust qualifies as a pass-through shareholder for the business, bears the income tax consequences of the operation of the business, and enjoys the statutory right to access corporate information. T. Ryan Legg Irrevocable Trust v. Testa, No. 2016-Ohio-8418 (Ohio S. Ct. Dec. 28, 2016), petition for cert. filed, Dkt. No. 17-84 (U.S. S. Ct. filed July 13, 2017). Oklahoma: An individual who sold substantially all of the assets of two S corporations, including goodwill, sold an indirect ownership interest in Oklahoma corporations and, therefore, qualified for a net capital gain deduction from Oklahoma income tax. In reaching this conclusion, the Oklahoma Supreme Court found that under the terms of the statute, the sale of an indirect ownership interest is synonymous with selling a pass-through entity's assets, and the statute places no limits on what particular pass-through entity assets qualify for the capital gain deduction except that the earnings must qualify for capital gain treatment under the IRC. In this case, the individual maintained the ownership interest for more than three years before the sale of the S corporations' assets as required by statute; thus, the Oklahoma Tax Commission erred by disallowing the full net capital gain deduction claimed on the individual's 2007 amended Oklahoma return. Hare v. Okla. Tax Comn., 2017 OK 60 (Okla. S. Ct. June 27, 2017). Texas: A Texas distributor (distributor) of farm tractors and related accessories did not qualify as a wholesaler (which is subject to a lower franchise tax rate), because it was not primarily engaged in a retail or wholesale trade. An administrative law judge (ALJ) of the office of the Texas Comptroller of Public Accounts concluded that more than 50% of the distributor's total revenue from retail or wholesale activities during the report years came from the sale of products made by the distributor or its affiliates. Moreover, affiliate-produced tractor bodies and parts and accessories were components of the final products the distributor assembled and sold and as such the distributor is considered the producer of the final product. Lastly, the statute of limitations barred the distributor's request for refund based on an amended apportionment of the distributor's margin for specific tax years. Tex. Comp. of Pub. Accts., No. 201705017H (May 5, 2017). Wisconsin: New law (SB 89) modifies Wisconsin's corporate income tax provisions, including those related to combined reporting. In regard to combined reporting, the reference to IRC §861(c)(1)(B) to define "active foreign business income" is replaced with the following definition: "gross income derived from sources outside the United States, as determined in subchapter N of the [IRC] including income of a subsidiary corporation, and attributable to the active conduct of a trade or business in a foreign country or in the U.S. possession." In addition, for the purpose of combined reporting a corporation is considered a subsidiary if the parent company owns, directly or indirectly, stock with at least 50% of the total voting power of the corporation and the stock's value is equal to at least 50% of the total value of the corporation's stock. These changes took effect June 23, 2017. Further, any waiver, closing agreement, power of attorney, and other documents related to the filing of a combined report, will be deemed to be executed by members of the combined group including a non-combined group member the Wisconsin Department of Revenue asserts is a member of the combined group. This change first applies to documents executed on Jan. 1, 2017. In addition, the bill extends the requirement to file information returns in order to claim a deduction to tax-option corporations, first applicable to taxable years beginning on Jan. 1, 2017 (previously only required of C corporations, partnerships, and individuals). Lastly, for purposes of claiming a capital gains income tax deferral or exclusion and effective June 23, 2017, the bill: (1) defines an "investment" as "amounts paid to acquire stock or other ownership interest in a partnership, corporation, tax-option corporation, or limited liability company treated as a partnership or corporation;" and (2) clarifies that a qualifying gain from the sale of an investment in a qualified Wisconsin business may not exceed the fair market value (FMV) of the investment on the date sold, less the FMV of the investment on the date acquired. Wis. Laws 2017, Act 17 (SB 89), signed by the governor on June 21, 2017. See also Wis. Dept. of Rev., Wis. News for Tax Professionals: 2017 Wisconsin Act 17 (June 22, 2017). Illinois: An Illinois company that leases medical trailers and other mobile equipment (lessor) was not entitled to a temporary storage exemption from use tax for three mobile units that were temporary stored in Illinois and then leased out of state because these units were later returned to Illinois for passive storage until they were again leased outside the state. In reaching this conclusion, the Illinois Appellate Court (Court) found the units' return to Illinois for additional storage defeats the temporary storage exemption requirement that the property be used solely outside of Illinois after its initial post-purchase storage. In addition, in regard to what constitutes "temporary storage," the Court declined to set any bright line span of time rule, but reasoned that storage in the state "for no more than 47 days while awaiting transport to out-of-state lessees falls within the scope of a 'limited time,' 'impermanent,' and 'transient.'" The Court also concluded the lessor was entitled to credit for taxes paid to other states on the units, as well as a depreciation deduction on the units' selling price for the time after the initial temporary storage in Illinois and before their return to Illinois. The lessor, however, was not entitled to the expanded temporary storage exemption, the credit for out-of-state taxes paid, or depreciation deductions for the units for which it did not possess the required exemption permit; in this instance the use tax immediately applied on the full value of the property and at that point no out-of-state taxes had been paid. Shared Imaging, LLC v. Hamer, No. 1-15-2817 (Ill. App. Ct., 1st Jud. Dist., June 28, 2017). Indiana: An out-of-state company's sales of online banking, online bill payment, and mobile banking products (collectively, "online products") are not subject to Indiana's sales and use tax, however, its sales of a finance and budget tool and electronic downloads of its mobile banking application within Indiana are subject to sales and use tax. The Indiana Department of Revenue (Department) found the company's sales of its online products are sales of nontaxable services and do not meet the definition of telecommunications services. The Department further reasoned the online products have limited functionality in that the basic software platform only allows account holders access to their bank accounts and the provision of tangible personal property with the service was incident to the service provided. Further, the Department found the true object of the sale at a single, bundled-price, is the provision of a service when the financial institution's aim is to provide custom information services for account holders. The company's sales of finance and budget tool and the electronic download of the mobile banking application within Indiana are transfers of tangible personal property and, therefore, are subject to sales and use tax unless a federal credit union purchases them. The finance and budget tool provides greater functionality and allows account holders to exercise a greater amount of control over the software, which makes the product taxable. Ind. Dept. of Rev., Rev. Ruling No. 2015-09ST (April 13, 2017). Washington: The U.S. Supreme Court has been asked to review the Washington Court of Appeals ruling in Irwin Naturals, in which it held an out-of-state company selling nutritional supplements at wholesale and retail to Washington customers has nexus with the state for sales and use tax purposes. Nexus creating activities the company engaged in within Washington included having $5 million in retail sales; participating in various marketing activities such as new item presentation, category review, promotional planning, and educating sales staff and trade show exhibitions; and engaging in a wide variety of activities with its wholesale customers. Irwin Naturals v. Wash. Dept. of Rev., No. 73966-2-I (Wash. Ct. App., Div. 1, July 25, 2016), petition for cert. filed, Dkt. No. 17-91 (U.S. S. Ct. July 14, 2017). Wisconsin: New law (SB 89) codifies a sales and use tax exemption for medical records and clarifies the imposition of tax on a transient lodging provider's charges for telecommunications services, ancillary services, internet access services and cable TV services used in providing lodging. Specifically, SB 89 codifies Cannon & Dunphy, S.C., enumerating an existing exemption for paper copies of medical records sold to a patient or authorized person. According to a legislative summary issued by the Wisconsin Department of Revenue (Department), sales of electronically transmitted medical records remain nontaxable. Provisions of SB 89 also clarify that hotels, motels, and other lodging providers are deemed to be consumers of the telecommunications services, ancillary services, internet access services, and cable TV services used in providing lodging services, even if the service provider charges its customer separately for the services. Therefore, a lodging provider's charges for these services are not taxable, but the lodging provider's purchase of these services is subject to tax. Lastly, SB 89 prohibits the Wisconsin Department of Revenue from issuing assessments or acting on refund or adjustment claims after the end of the calendar quarter that is four years after the year in which a county enacts a repeal ordinance. These provisions took effect June 23, 2017. Wis. Laws 2017, Act 17 (SB 89), signed by the governor on June 21, 2017. See also Wis. Dept. of Rev., Wis. News for Tax Professionals: 2017 Wisconsin Act 17 (June 22, 2017). Delaware: New law (SB 125) sets the maximum amount of Historic Preservation Tax Credits shall not exceed $6.5 million for the fiscal years 2018-2020. Otherwise, the maximum amount of credit is $5 million each fiscal year. Del. Laws 2017, SB 125, signed by the governor on July 3, 2017. Louisiana: New law (HB 300) extends the Louisiana R&D tax credit by two years to Dec. 31, 2021. The law restores the refundability of credits in FY19 (tax year 2018) for firms receiving credits based on their federal Small Business Innovation Research (SBIR) award or federal Small Business Technology Transfer Program (SBTT) grant (made nonrefundable for all participants in 2015). HB 300 also reduces the R&D credit amounts taxpayers may claim by lowering credit rates across the board. The new rates will be 30% for SBIR/SBTT firms (formerly 40%), 30% for firms with less than 50 employees (formerly 40%), 10% for firms with 50-100 employees (formerly 20%), and 5% for firms with more than 100 employees (formerly 8%). Firms with more than 50 employees also will be subject to an 80% base amount spending threshold (formerly 70%). For the first time, firms with less than 50 employees must demonstrate an increase in their base amount before they can qualify for the credit. The bill applies to tax years beginning on and after Jan. 1, 2017. La. Laws 2017, Act 336 (HB 300), signed by the governor on June 22, 2017. For more on other legislation enacted during 2017 Louisiana general session, see Tax Alert 2017-1121. Louisiana: New law (SB 183) sets termination dates for several credits. Major credit end dates include the Enterprise Zone Program (July 1, 2021), Quality Jobs Program (July 1, 2022), Competitive Projects Payroll Incentive Program (July 1, 2022), and severance tax rebates with mega-project for co-op endeavor agreements (July 1, 2022). La. Laws 2017, Act 386 (SB 183), signed by the governor on June 23, 2017. For more on other legislation enacted during 2017 Louisiana general session, see Tax Alert 2017-1121. Louisiana: New law (HB 237) extends the deadline of the Enterprise Zone Program from July 1, 2017 to July 1, 2021. The Enterprise Zone Program allows businesses to enter into contracts with the Board of Commerce and Industry to receive income tax credits or sales and use tax rebate plans in exchange for the creation of a certain number of jobs. La. Laws 2017, Act 206 (HB 237), signed by the governor on June 14, 2017. For more on other legislation enacted during 2017 Louisiana general session, see Tax Alert 2017-1121. Puerto Rico: The Puerto Rico Disbursement and Tax Concession Committee has issued Resolution 2017-05 of June 20, 2017 (the Resolution) with guidance on the use of tax credits granted as of March 7, 2017, for tax year 2017 and thereafter. Under the Resolution, taxpayers may use granted tax credits to offset 25% of their income tax liability for tax year 2017 and for three subsequent tax years, for a maximum of four tax years. Credit holders, however, may submit a request with the Authorization Committee for Disbursements and Tax Credits to extend the period for using the credits an additional three years. The Resolution allows credit holders to sell or assign the tax credits if permitted by the particular statute, and the buyer or assignee will be subject to the limitations of this Resolution. Any unused credits at the end of the four-year period or three-year extension will expire. For tax credits available to be used for the first time in tax year 2017, the 25% limit will not apply until tax year 2018. For more information on this development, see Tax Alert 2017-1183. Kansas: Equipment used to produce oil is not included within the meaning of "oil lease" for purposes of the property tax exemption for certain low production oil leases under Kan. Stat. Ann. § 79-201t(a). In reaching this conclusion, the Kansas Court of Appeals (Court) found no statutory or judicial evidence that specifically addressed whether equipment is exempt, but read several statutory provisions together to find that equipment used in producing oil is not part of an oil lease for this specific tax exemption. The Court reasoned that: (1) a personal property statute distinguished between equipment and the oil lease itself; (2) exempting equipment (generally assessed based on a combination of economic life, retail cost when new, and depreciation) would not comport with the apparent purpose of the statute to exempt certain low producing oil leases because of low productivity and income; (3) the legislature could have but did not expressly exclude equipment from tax in low producing oil leases; and (4) persons who own oil and gas leases or who are engaged in operating for oil and gas are subject to a tax penalty for failing to file an oil and gas property assessment statement. The Court also found "most compelling statutory provisions which evidence legislative intent to tax equipment separately from oil leases are the parallel provisions found in the exemption statute and rate statute." In addition, the Court found the county which issued the assessment did not err in consulting an oil and gas appraisal guide published by the Kansas Department of Revenue that stated that the royalty interest and the production equipment do not qualify for the exemption. In the Matter of the Protest of Barker, No. 116,034 (Kan. App. Ct. June 30, 2017). Michigan: The Michigan Supreme Court (Court) expanded its interpretation of the third factor of the six-part Wexford3 test used to determine whether an institution is entitled to a charitable exemption from property tax. The Court found the third factor, which requires an institution not offer its charity on a "discriminatory basis," excludes only restrictions or conditions on charity that bear no reasonable relationship to a permissible charitable goal. The "reasonable relationship" test should be construed broadly to prevent unnecessarily limiting the restrictions a charity may choose to place on its services. If an institution's restriction is reasonably related to a goal that meets Wexford's fourth factor (bringing people's minds or hearts under the influence of education or religion; relieving people's bodies from disease, suffering, or constraint; assisting people to establish themselves for life; erecting or maintaining public buildings or works; or otherwise lessening the burdens of government), then it is acceptable under Wexford's third factor. In addition, the Court held the analysis of a charitable institution's fees should be assessed under Wexford's fifth factor (permitting charitable institutions to charge for their services provided they are not more than what is needed for its successful maintenance) rather than under the third factor. The Court vacated and remanded the case regarding whether a non-profit corporation that runs an adult foster care facility is entitled to a charitable exemption from property tax, finding the lower courts decided the case based on an incorrect understanding of the third factor. Baruch SLS, Inc. v. Tittabawassee Twp., No. 152047 (Mich. S. Ct. June 28, 2017). New Hampshire: New law (SB 78) requires a taxpayer's business profits tax records obtained by the New Hampshire Commissioner of Revenue and Administration (or his/her agents) for an audit or for use in a judicial proceeding be kept confidential and not disclosed for any purpose, unless required by law. This provision takes effect Sept. 16, 2017. N.H. Laws 2017, Ch. 254 (SB 78), signed by the governor on July 18, 2017. Vermont: The Vermont Department of Labor announced that a coding error involving the charging of interest for underpaid state unemployment insurance contributions was discovered during meetings regarding the modernization of its 30-year old legacy unemployment system. For additional information, see Tax Alert 2017-1192. Delaware: New law (HB 279) increases the realty transfer tax to 3% (from 2%) of the value of property represented by the recording document. In municipalities or counties that have enacted the full 1.5% realty transfer tax authorized by statute, the tax will be 2.5% (from 1.5%). The tax is payable at the time of making, execution, delivery, acceptance, or presenting of the document for recording, and is apportioned equally between the grantor and grantee. The realty transfer tax rate on building construction contracts or related agreements increases to 2% (from 1%) on amounts that exceed $10,000, paid by the owner of the building whose construction is subject to the tax. The rate change takes effect Aug. 1, 2017, and does not apply to the transfer of real estate pursuant to a sales contract entered into before Aug. 1, 2017. Del. Laws 2017, Ch. 56 (HB 279), signed by the governor on July 3, 2017. Wisconsin: A common carrier engaged in the business of providing mass transportation to the general public is entitled to a diesel fuel tax exemption under Wis. Stat. § 78.01(2m)(e) for fuel used to transport passengers within Milwaukee County and two contiguous counties, because the transportation "takes place … within a county having a population of 500,000 or more or within such counties and counties contiguous thereto … ." In so holding, the Wisconsin Tax Appeals Commission rejected the Wisconsin Department of Revenue's proposed reading of the statute, which added words that would have required the transportation of passenger take place "entirely within" Milwaukee County and the contiguous counties in order to qualify for the fuel tax exemption. Under such a reading, the carrier would not qualify for the exemption since its transportation services included stops outside these counties (i.e., not entirely within the defined geographic area). Wis. Coach Lines, Inc. v. Wis. Dept. of Rev., No. 15-V-166 (Wis. Tax App. Comn. June 21, 2017). Illinois: New law (Public Act 100-0022) enacted the Illinois Revised Uniform Unclaimed Property Act (IL-RUUPA); the first comprehensive rewrite of Illinois' unclaimed property statute since the original adoption of the Uniform Disposition of Unclaimed Property Act in 1961 (Act). It is largely based on the Revised Uniform Unclaimed Property Act (RUUPA) of the Uniform Law Commission (ULC), which was promulgated to the states in 2016, with some modifications. The ULC's rewrite of the Uniform Act was intended to modernize the prior versions of the Act (the latest being issued in 1995) for considerations such as changes in electronic commerce, creating standardization among states and clarifying areas of the law that were often confusing to holders. A key change in the revised version of the RUUPA adopted in SB 9 not only repeals the existing business-to-business (B2B) exemption (whereby holders did not previously need to report outstanding balances arising with business associations located in Illinois), but also adds a transitional provision to the law, creating "catch-up" reporting requirements and additional considerations for holders during the 2018 reporting cycle. Ill. Laws 2017, Public Act 100-0022 (SB 9), enacted over the governor's veto on July 6, 2017. For an in-depth discussion of the changes, see Tax Alert 2017-1197. Delaware: Adopted regulation (Del. Admin. Code § 12-301) establishes guidelines addressing estimation requirements for the Delaware Department of State's abandoned or unclaimed property voluntary disclosure agreement (VDA) program. Estimation-related information in the regulation covers base periods (such as record retention requirements of 10 years plus dormancy, which is 15 years total for most property types), items to be excluded from the estimation calculation, aging criteria, and projection methods. The new regulation also provides guidance on how holders of unclaimed property (holders) determine the scope of the entities and property types included in a VDA, and the extent to which holders must have complete and researchable records when entering into a VDA. At the end of the VDA period, the Department will only provide a release of liability for what is determined to be in-scope; excluded property types and/or entities would be subject to audit. The new regulations took effect July 11, 2017. Del. Dept. of State, Del. Admin. Code § 12-301 (Del. Register of Regs. issued July 1, 2017). Wisconsin: New law (SB 89) provides that the Wisconsin Department of Revenue (Department) is no longer required to pay interest on the proceeds from the redemption of unclaimed property that is a US Savings Bond. Previously, the Department was required to pay interest on unclaimed property received, including US Savings Bonds, if the property was interest bearing to the owner at the time the holder delivered the property to the Department. This change took effect June 23, 2017. Wis. Laws 2017, Act 17 (SB 89), signed by the governor on June 21, 2017. See also Wis. Dept. of Rev., Wis. News for Tax Professionals: 2017 Wisconsin Act 17 (June 22, 2017). Federal: On July 18, 2017, the House Ways and Means Trade Subcommittee held a hearing on "Modernization of the North American Free Trade Agreement (NAFTA)." Testimony from the hearing is posted here. For additional information on this development, see Tax Alert 2017-1167. Federal: US Trade Representative (USTR) Robert Lighthizer has formally notified Congress and the public of the Trump Administration's objectives for the renegotiation of the NAFTA. Issuing the July 17, 2017 Summary of Objectives for the NAFTA Renegotiation begins the final 30-day period before the United States can formally initiate NAFTA renegotiations with Canada and Mexico in accordance with the provisions of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA). USTR Lighthizer had provided notice of intent to renegotiate NAFTA (in accordance with a 90-day Congressional notice requirement of TPA) on May 18, 2017, and appears to be staying on course for a targeted start date for negotiations with Canada and Mexico on or shortly following August 16, 2017. The USTR momentum is consistent with comments from Mexican Foreign Minister Luis Videgaray that the countries had agreed to start renegotiation on Aug. 16, 2017, and will seek to generate agreements, at least in general terms, by year-end. For additional information on this development, see Tax Alert 2017-1160. Multistate: Panelists on the recent Current developments in state and local tax audits and controversy webcast by Ernst & Young LLP (EY) compared and contrasted the Texas, California and Pennsylvania appeals processes and discussed the state and local tax impact of federal tax reform. Featured guests from the California State Board of Equalization (SBE) and Pennsylvania Office of Attorney General (OAG) also provided valuable insight into their respective tax controversy and appeals processes. These guests were Diane Harkey, Chairwoman of the SBE; Jonathan Goldman, Pennsylvania Executive Deputy Attorney General of the Civil Law Division; and Karen Gard, Pennsylvania Acting Chief Deputy Attorney General of the Tax Litigation Section. The webcast is now available for replay on the EY Thought Center website. See Tax Alert 2017-1165 for a summary of the webcast. Because the matters covered herein are complicated, State and Local Tax Weekly should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor. 1 Astoria Fed. Sav. & Loan Assn. v State of New York, 222 AD2d 36 (2d Dept. 1996), cert denied 522 US 808 (1997). Document ID: 2017-1251 |
