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June 22, 2020

State and Local Tax Weekly for June 12

Ernst & Young's State and Local Tax Weekly newsletter for June 12 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.


State tax agency responses to the COVID-19 pandemic

The Indirect Tax COVID-19 state response matrix provides updates on the latest state tax agency responses related to the COVID-19 emergency. The matrix is available on EY's Indirect Tax COVID-19 state response website, which is accessible directly through this link, or on where other important tax-related information pertaining to the COVID-19 emergency is available.


Internet Tax Freedom Act's prohibition against taxing Internet access applies to all states beginning July 1, 2020

On June 30, 2020, the grandfathering provisions of the Internet Tax Freedom Act (ITFA),1 which permitted states that taxed Internet access before the ITFA's enactment to continue doing so, will expire. Accordingly, the six remaining states that tax Internet access (i.e., Hawaii, New Mexico, Ohio, South Dakota, Texas and Wisconsin) must, by federal law, stop charging those taxes beginning July 1, 2020.

Originally enacted in 1998 as a temporary moratorium barring federal, state and local governments from imposing Internet access taxes, as well as multiple or discriminatory taxes on electronic commerce, ITFA was renewed eight separate times before being made permanent in 2015 under the Trade Facilitation and Trade Enforcement Act of 2015 (Act).2 In addition to making ITFA permanent, the Act repealed the grandfathering provisions effective June 30, 2020.

Tax authorities in South Dakota, Texas and Wisconsin have expressly indicated that they will no longer tax Internet access after June 30, 2020. On June 8, 2020, the Ohio Department of Taxation (OH DOT), issued guidance3 outlining ITFA's impact on the Ohio sales and use tax treatment of automatic data processing and electronic information services.

At this time, Hawaii and New Mexico, each of which impose a general gross receipts tax that operates as each state's sales tax but is much broader in application because it generally applies to all services, have not provided specific guidance on the applicability of the expiration of the ITFA grandfathering clause to their Internet access taxes.

Taxpayers that are currently charged Internet access taxes in any of these states should carefully review invoices from their Internet service providers after June 30, 2020, to verify that any such tax is no longer applied to their account. Additionally, taxpayers subject to tax on Internet access services in Hawaii, Ohio and New Mexico should closely monitor the responses from the revenue agencies in these states, particularly on whether each may attempt to continue taxing Internet access services by reclassifying them as taxes on data, information services or other taxable services, and if any judicial challenges or controversy involving the federal preemption may arise. It is possible that, in response to recent U.S. Supreme Court holdings (such as NCAA v. Murphy4), these states could mount a challenge to what they may view as an attempt by Congress to hamstring their state sovereignty by limiting their ability to continue taxing Internet access.


Kansas: New law (HB 2585) exempts certain utilities from Kansas income tax, prohibits certain electric and natural gas public utilities from being included in a consolidated or unitary combined return, and imposes requirements for tracking changes to income tax collection. The following utilities are exempt from income tax: (1) cooperatives or utilities owned by cooperatives; and (2) effective for tax years ending on or after Jan. 1, 2021, every electric and natural gas public utility that is subject to rate regulation by the Kansas Corporation Commission. The law also prohibits electric and natural gas public utilities subject to rate regulation (excluding cooperative utilities or those owned by cooperatives) from being included in a consolidated or unitary combined return, and from collecting, as a component of its retail rates, Kansas income tax expenses. Lastly, a public utility that includes expenses related to income taxes as a component of its retail rates is required to track and defer into a regulatory asset or liability any overcollection or undercollection of income tax expense if the income tax rates assessed on the utility are adjusted based on any changes in state or federal law. HB 2585 takes effect July 1, 2020. Kan. Laws 2020, HB 2585, signed by the governor on June 1, 2020.

Maine: A multistate corporation that manufactures and sells food and beverage products is not entitled to an alternative apportionment of the income from a unitary affiliate's 2010 sale of pizza assets because the single sales factor apportionment method fairly reflects the Maine business activity of both the corporation and the affiliate. In so holding, the Maine Supreme Judicial Court (court) said that applying the sales factor to the income from the sales is consistent with the Legislature's state preference of calculating the sales factor using total sales (i.e., gross receipts) rather than net profits (i.e., profit) and such application is not unfair to the corporation. Further, the court found the corporation's reliance on the opinions in California cases such as General Mills5(distortion caused by gross receipts from hedging activity)and Microsoft Corp.6 (distortion caused by inclusion of gross receipts resulting from short-term investment activity) was "misplaced", noting that those opinions "dealt with a unique 'paradigm' distinct from the situation here." According to the court, the facts of this case do not present the "exceptional circumstances" necessary to justify the use of an alternative apportionment method; rather, inclusion of the gross receipts in the sales factor "fairly reflects the extent" of the corporation's business activity in the state. The court also determined that the corporation is not entitled to a partial abatement of substantial underpayment penalties on this assessment because no "exceptional circumstances" justified deviating from the standard single sales factor apportionment method. The court reasoned that Maine's unitary business provisions are not so vague and difficult to apply as to constitute a reasonable cause for understating liability by more than 10%, and the corporation failed to demonstrate substantial authority to support a conclusion that it and its affiliates were not part of a unitary business. Finally, the court found a second assessment made on May 3, 2017, based on the disallowance of the corporation's capital loss carryforward from the same tax year, was timely because a six-year statute of limitations applied. Me. State Tax Assessor v. Kraft Foods Group, Inc., et al., 2020 ME 81 (Me. Sup. Jud. Ct. June 4, 2020).

Mississippi: A corporation is required by statute to include the capital of its single-member limited liability companies (SMLLCs) in its franchise tax base for the 20082010 tax years and report its subsidiaries' Mississippi activity on its combined return because the SMLLCs' assets were not exempt from tax and were included in the corporation's franchise tax base as the SMLLCs' parent even though the SMLLCs, as disregarded entities, were not required by statute to file their own franchise tax returns. The Mississippi Supreme Court (court) said the corporation, which was the sole member of its SMLLCs, could not avoid paying the franchise tax by structuring its business to keep capital out of its franchise tax base. The court also rejected the corporation's argument that the chancery court was barred from affirming the denial of the corporation's refund claim and was divested of authority over the case since the Mississippi Department of Revenue did not issue an undisputed portion of its refund claim within 30 days after the corporation filed its chancery court complaint.7 Instead, the court found the chancery court properly had appellate jurisdiction over the case, and the corporation's claim was procedurally barred due to being raised for the first time on appeal. The Williams Co.'s, Inc. v. Miss. Dept. of Rev., No. 2018-CA-01487-SCT (Miss. S.Ct. June 4, 2020).


Louisiana: New law (SB 138) establishes marketplace facilitator laws for Louisiana state and local sales and use tax purposes, effective July 1, 2020. Under the new law, a marketplace facilitator is considered the dealer for each remote sale for delivery into Louisiana and transacted on its own behalf or on behalf a marketplace seller and is responsible for collecting and remitting state and local sales and use tax on such sales. These requirements only apply to a marketplace facilitator that makes or facilitates a remote sale for delivery in Louisiana of tangible personal property, electronically transferred products, or services, if during the prior or current calendar year met either of the following: (1) its gross revenue from such sales exceed $100,000 or (2) such sales were made in 200 or more separate transactions. In determining whether the threshold has been met, all sales will be considered. A marketplace facilitator that does not meet the threshold can voluntarily register for and collect and remit state and local sales and use tax as a dealer. In addition, if neither a dealer nor any of its affiliates meet the economic nexus thresholds, the dealer may collect sales and use tax as a direct marketer. If, however, either the dealer or any of its affiliates meet the economic nexus threshold the dealer is required to collect state and local sales and use tax on remote sales for delivery into the state and remit it to the Louisiana Sales and Use Tax Commission for Remote Sellers. In addition, the law: (1) allows vendor's compensation to be deducted against tax due on timely filed returns; (2) sets procedures and deadlines a marketplace facilitator must follow after meeting either the economic or transaction threshold; (3) provides penalty relief to a marketplace facilitator that fails to collect the proper amount of tax due to insufficient or incorrect information provided by the marketplace seller; (4) requires tax be paid monthly; and (5) defines key terms. La. Laws 2020, Act No. 216 (SB 138), signed by the governor on June 11, 2020. Additional information, including a draft bulletin on collection requirements for marketplace facilitators, is available here.

Louisiana: The Louisiana Department of Revenue (LA DOR) announced that remote sellers are required to register with the Louisiana Sales and Use Tax Commission for Remote Sellers (Commission) effective July 1, 2020. Within 30 days after meeting either the economic or the transaction threshold (i.e., either more than $100,000 in gross revenue from Louisiana sales or 200 or more separate transactions delivered into Louisiana), remote sellers must submit an application to the Commission for approval to collect state and local sales and use tax on remote sales delivered into the state. Once the Commission has approved the application, and no later than 60 days after surpassing either of the thresholds, remote sellers must begin collecting and remitting tax. Further, Louisiana law allows direct marketers, on a voluntary basis, to collect and remit at the statutory 8.45% rate until the Commission enforces registration, collection and remittance of state and local sales and use tax based on the applicable state and local rates and bases. The LA DOR said that it is sending these direct marketers information explaining the streamlined, transition process with next step instructions. Direct marketers that do not meet the economic or transaction threshold may continue to voluntarily collect and remit tax at the 8.45% rate. La. Dept. of Rev., Remote Sellers Information Bulletin No. 20-002 (May 7, 2020). Additional information, including FAQs, is available here.

Missouri: In reversing the Administrative Hearing Commission, the Missouri Supreme Court (court) held a professional football team is not liable for sales and use tax on certain items (i.e., video equipment, end-zone scoreboards and other scoreboards, wayfinding signs, etc.) used to renovate the stadium and related facilities the team leases from the sports complex authority, because the team was not the "purchaser" of these items for Missouri sales and use tax purposes.8 In so holding, the court explained that under the sales and use tax laws, a taxpayer is the "purchaser" that engaged in a taxable transaction when the taxpayer (1) provides a valuable consideration (2) in exchange for the acquisition of title or ownership over the property. Here, the team could not be the purchaser because it did not provide valuable consideration in exchange for the items at issue. Rather, to determine "who" the purchaser is, the court had to determine whether the monies in the renovation project fund belonged to the team or to the county /sports authority. Ultimately, the court concluded that because the team sold tax credits to unrelated third parties and donated the proceeds to the renovation project fund, the proceeds were owned by the county /sports complex authority and not the team. Lastly, the court found that money the team donated to the finance board in return for the tax credits, and which the finance board placed in its infrastructure development fund and subsequently granted to the renovation project, belong not to the team but to the project. Accordingly, the project funds were not the team's when the purchases were made. The Kansas City Chiefs Football Club, Inc. and Jackson County Sports Complex Authority v. Mo. Dir. of Rev. , No. SC97730 (Mo. S.Ct. June 2, 2020).

North Carolina: New law (HB 1079) exempts certain digital property and online learning from sales and use tax and expands an exemption for large fulfillment facilities, among other changes. Effective retroactively to, and applicable to sales occurring on or after, Oct. 1, 2019, the law modifies definitions related to digital property ("digital audio work", "digital audiovisual work", "certain digital property") and defines new terms ("additional digital goods", "digital book", "educational service", "specified digital products", "qualifying educational entity", "transferred electronically") and provides that specified digital products and additional digital goods do not include an information service or an educational service. The law exempts from sales and use tax sales of digital audio work or a digital audiovisual work that is a qualifying education expense to the operator of a home school or that consists of nontaxable service content when the electronic transfer of such work occurs contemporaneously with the provision of the nontaxable service in real time. A tax enforcement grace period for tax due for a filing period beginning on or after Oct. 1, 2019 and ending before Aug. 1, 2020 applies. Further, effective July 1, 2020, the law expands the sales and use tax exemption related to large fulfillment facilities. Sales of equipment or an accessory, an attachment, or a repair part for equipment that meets all the following requirements will be exempt when: (1) it is sold to a large fulfillment facility or to a contractor or subcontractor if the purchase is for use in the performance of a contract with a large fulfillment facility; (2) it is not electricity; and (3) it is used at the facility for any of the following purposes: (a) in the distribution process, including receiving, inventorying, sorting, repackaging, or distributing finished retail products; (b) baling previously used packaging for resale, sanitizing required by federal law, or material handling. (Additions in italics). A refund of North Carolina state and local sales and use taxes paid (or paid by a contractor or subcontractor on the facility's behalf), is available for large fulfillment facilities for eligible exempt purchases made on or after April 1, 2020 but before July 1, 2020. A written refund request must be made on or after July 1, 2020 and before Oct. 1, 2020. Lastly, the law provides sales and use tax relief to auctioneers and estate sale companies for certain sales made during specified periods. Except as otherwise noted, these provisions take effect when HB 1079 becomes law. N.C. Laws 2020, ch. SL 2020-6 (HB 1079), signed by the governor on June 5, 2020.


Federal: In proposed regulations (REG-112339-19), the IRS explains two new carbon capture credits enacted in 2018 under IRC  Section  45Q for qualified carbon oxide captured by taxpayers using carbon capture equipment at a qualified facility. The proposed regulations address, among other things, (1) secure geological storage, (2) contracting with third parties for the disposal, injection, or utilization of qualified carbon oxides and allowing third parties to claim the IRC  Section  45Q credits, (3) the definition of the recapture period for carbon oxides that are not properly captured, and (4) clarification of the meaning of the statutory term "utilization" of captured carbon. The proposed regulations would apply to tax years beginning on or after the date the final regulations are published in the Federal Register. Taxpayers may choose to apply the final regulations for tax years beginning on or after Feb. 9, 2018 (when IRC  Section  45Q was amended by the Bipartisan Budget Act of 2018 (P.L. 115-123) (BBA)). In addition, taxpayers may apply the proposed regulations for tax years beginning on or after Feb. 9, 2018, and before the date the Treasury decision adopting these regulations as final regulations is published in the Federal Register, provided the taxpayer follows the proposed regulations consistently and in their entirety. For additional information on this development, see Tax Alert 2020-1515.

Maryland: New law (SB 751) amends and extends the apprenticeship income tax credit, including modifying the definition of "eligible apprentice". The credit is now available for tax years beginning after Dec. 31, 2016 but before Jan. 1, 2025 (previously Jan. 1, 2020), with a sunset date of June 30, 2025 (previously June 30, 2020). The amount of credit available is either: (1) $1,000 for each eligible apprentice; or (2) for the first five eligible apprentices for whom the taxpayer claims the credit, $1,000 for each eligible apprentice if that apprentice is employed through a youth apprenticeship program and $3,000 for each eligible apprentice who is not employed through a youth apprenticeship program. Unused credit is not refundable but can be carried forward to succeeding taxable years until the full excess amount is used. The credit is capped at $15,000 per tax year for any taxpayer, and the state will approve qualifying applications on a first-come, first-served basis, and must notify a taxpayer within 45 days of the application's receipt of its approval or denial. SB 751 took effect June 1, 2020. Md. Laws 2020, ch. 643 (SB 751), became law without the governor's signature on May 8, 2020.

South Carolina: New law (SB 76) extends the High Growth Small Business Job Creation Act to Dec. 31, 2025 (from Dec. 31, 2019). The law re-enacts the High Growth Small Business Job Creation Act as it existed on Dec. 31, 2019 and provides that the credits will be earned and claimed under the same terms as conditions as they existed on Dec. 31, 2019. In addition, the law extends for five years to July 1, 2024 (from July 1, 2019) the Energy Efficient Manufactured Homes Incentive Program and the maximum sales tax provision on manufactured homes. SB 76 took effect upon the governor's approval. S.C. Laws 2020, Act 138 (SB 76), signed by the governor on May 26, 2020.


Delaware: A Delaware Chancery Court (court) held that Delaware's three counties failed to assess all property subject to assessment at its true value in money as required by the True Value Statute (Del. Code tit. 9, §8306(a)) and violated the Delaware Constitution's Uniformity Clause (Del. Const. art. VIII, § 1) by imposing property tax in a non-uniform way. In reaching these conclusions, the court found that the counties' property assessments using indefinite-base-year valuations from three and four decades ago (i.e., 1974, 1983 and 1987), and sometimes further reducing these valuations by 50% or 60%, deviated from present fair market values to an unacceptable degree and treated similarly classified properties differently by not accounting for differences in appreciation. For example, Sussex and Kent Counties use assessments that reflect just 8.435% and 20.64% of present fair market values, respectively.9 New Castle County, on the other hand, provides its assessment rolls to the City of Wilmington, violating the Assessment Roll Statute (collectively, Del. Code. tit. 22, §§1101, 1103 and 1104) by depriving Wilmington of its right to receive an accurate determination of total assessed value certified by county officials. (New Castle County did not violate the Same Rate Statute (Del. Code tit. 9, § 8101(b) because Wilmington did not show that the county does not apply the same nominal tax rates to four categories of real property.) The court said that remedies will be determined after additional proceedings, noting that the "[COVID-19] pandemic likely will introduce additional and significant considerations for the remedial calculus, particularly regarding the timing of a remedy." In re Delaware Public Schools Litigation, No. 20180029-JTL County Track (Del. Chancery Ct. May 8, 2020).

Texas: A corporation and its wholly owned subsidiary are not subject to personal property tax on commercial trucks that were temporarily located in Dallas County during tax-year 2016. In so holding, a Texas appeals court found that under the ordinary meaning of "temporary" for the applicable statute (Tex. Tax Code §21.02(a)), the trial court could reasonably conclude that the trucks were not located in the county for more than a temporary period. The trucks were located on a specific property for periods of one hour to two days, no trucks were stationed at this property, they did not return to that property between assignments and the trucks were not based at any specific location. Additionally, because the Texas Tax Code does not define the term, under the plain and ordinary meaning of "owner," the subsidiary owned the trucks and did not maintain a principal place of business in Dallas County in 2015 or on Jan. 1, 2016. Dallas Central Appraisal Dist. and Dallas Cnty. Appraisal Rev. Bd. v. Nat'l Carriers, Inc. and NCI Leasing, Inc., No. 05-18-01520-CV (Tex. Ct. App., 5th Dist., May 5, 2020).


Louisiana: New law (SB 283) extends the time in which a taxpayer that failed to make and file any local sales and use tax return or report has to respond to a local tax determination issued by a tax collector from 15 days to 30 days. The law also extends from 30 days to 60 days the time in which a taxpayer has to take action after the collector issues a proposed notice of assessment. These changes take effect Jan. 1, 2021. La. Laws 2020, Act No. 118 (SB 283), signed by the governor on June 9, 2020.


Multistate: As of June 5, 2020, 11 states (i.e., California, Colorado, Connecticut, Hawaii, Illinois, Massachusetts, New York, Ohio, Texas, the Virgin Islands and West Virginia) have applied for and been approved for federal unemployment insurance (UI) Title XII advances (UI loans). As of June 5, 2020, California and New York currently have outstanding federal loan balances of $365,000,000 and $1,176,802,785, respectively. The Virgin Islands continues to carry a federal loan balance of $59,066,850 on a loan that has existed since 2009. For more on this development, see Tax Alert 2020-1540.

Virginia: New law (SB 7; HB 395) will incrementally increase the state minimum wage to $12 per hour by 2023, and possibly to $15 by 2026. The first effective date of the increase was delayed upon the governor's request until May 1, 2021 to provide relief for employers affected by the COVID-19 emergency. Currently, the Virginia state minimum wage matches the federal minimum wage of $7.50. The law increases the state minimum wage to $9.50 per hour as of May 1, 2021; $11 per hour effective Jan. 1, 2022; and $12 per hour effective Jan. 1, 2023 until Jan. 1, 2025. Provisions in the legislation that would increase the state minimum wage to $13.50 on Jan. 1, 2025 and to $15 on Jan. 1, 2026, will not become effective unless reenacted by a regular or special session of the legislature prior to July 1, 2024. For more information on this development, see Tax Alert 2020-1514.


Arizona: The Arizona Supreme Court (court) ruled the City of Phoenix Ordinance G-6650, which provides for the increase of existing and establishment of new commercial ground transportation trip fees, is constitutional and does not violate Proposition 126's ban on new or increased levies on services. The court also lifted the stay of enforcement placed on the Ordinance, and it said that it would issue a written opinion "in due course." Arizona v. City of Phoenix, No. CV-20-0019-SA (Ariz. S.Ct. April 2, 2020).

Kentucky: New law (HB 229) imposes the commercial mobile radio service (CMRS) prepaid service charge at a flat rate of $0.93 on each retail transaction involving the purchase or sale of any prepaid wireless telecommunications service. The law amends the definition of prepaid wireless telecommunications service to mean "a wireless telecommunications service that, if purchased, is required to be paid for in advance and is either sold in predetermined units, dollars, or time which decline with use in a known amount, or is sold for unlimited use during a predetermined period of time." These changes take effect July 15, 2020. Ky. Laws 2020, Acts ch. 40 (HB 229), signed by the governor March 27, 2020.


Texas: New and amended rules (34 Tex. Admin. Code §§ 13.4, 13.6-13.8, and 13.21) clarify unclaimed property reporting and compliance requirements. The revisions require tangible personal property to be reported according to the current Unclaimed Property Reporting Instructions of the Texas Comptroller of Public Accounts (Comptroller). For tangible personal property, other than the contents of a safety deposit box, a holder when making a property report, generally must separately provide an inventory of the property that clearly describes the property being reported and identifies whether it is contaminated by biohazardous or other medical waste. The Comptroller can require a holder to provide additional information about reportable property and can determine that such property has insubstantial commercial value and may require the holder to dispose of it. Further, the provisions describe the minimum requirements for identifying claimed property in making an unclaimed property claim, placing the burden of such identification on the claimant and imposing additional documentation requirements on claims involving mineral proceeds with an unknown or unidentified owner. Lastly, the Comptroller can require an electronic file format for holders' property reports, as provided in the Comptroller's Unclaimed Property Reporting Instructions. The new and amended regulations took effect on May 11, 2020. Tex. Comp. of Pub. Accts., new and amended 34 Tex. Admin. Code §§ 13.4, 13.6-13.8, and 13.21 (45 Tex. Reg. 3135 May 8, 2020).


Federal: With the United States (US)-Mexico-Canada Free Trade Agreement (USMCA or Agreement) set to take effect on July 1, 2020, the US Trade Representative (USTR) recently released four chapters of the uniform regulations necessary for understanding implementation of key provisions of the USMCA. The documents released on June 3, 2020 are not the Agreement's complete regulatory text, however, they provide the legal framework related to: (1) Chapter 4, Rules of Origin; (1) Chapter 5, Interpretation, application, and administration of origin procedures; (3) Chapter 6, Textiles and apparel goods; and (4) Chapter 7, Customs Administration and Trade Facilitation. The regulations reflect USMCA Interim Implementation Instructions of US Customs and Border Protection (CBP), with the bulk of the information covering the interpretation, application and administration of rules of origin, as well as providing increased insight into the changes that USMCA enacts, especially for the automotive industry. The regulations, trilaterally agreed, also finalize treatment of sets, further define de minimis calculations and exceptions under the USMCA, as well as establish calculations for labor and steel and aluminum content pertaining to the automotive chapters. While significant hurdles remain for companies as they develop their USMCA compliance programs, a firm understanding of the released regulations will help companies prepare for the USMCA's entry into force. For additional information on this development, see Tax Alert 2020-1543.


International: Indonesia's Minister of Finance (MOF) issued implementing regulations on May 5, 2020 for the expansion of Value-Added Tax (VAT) to include cross-border digital transactions effective from July 1, 2020. The regulations provide for collection mechanisms and grant the Indonesian Director General of Tax (DGT) the power to appoint international digital or platform providers as VAT collectors. Although further details will be forthcoming, multinational companies should review these changes and prepare for implementation. Tax Alert 2020-1518 summarizes the key highlights of the proposed changes.


Multistate: On July 28, 2020 from 4:00-5:00 (ET), Ernst & Young LLP will host a webcast on teleworker tax implications for COVID-19 and beyond. In their response to the COVID-19 pandemic, states and localities issued stay-at-home orders and guidelines for social distancing that dramatically increased the number of employees working from home. As businesses begin to reopen, they are considering other benefits of teleworking and analysts predict that the COVID-19 emergency has sparked a new upward trend in telework arrangements that will survive long after the governmental responses to the immediate crisis subside. A shift in an employee's work location from the office to their home can have broad tax implications for businesses and employees that are important to consider when evaluating and implementing telework arrangements. To help employers identify the tax implications of telework arrangements, in this webcast, EY will bring together professionals from its employment and business tax subservice lines to discuss: state and local income tax withholding for residents and nonresidents; determining the applicable state for unemployment insurance and similar taxes; nexus implications for corporate income, sales and use and other business taxes; state and local tax relief made available to employers and employees in response to the COVID-19 emergency and their limitations; determining if travel expenses of home office workers are excluded from taxable wages; and steps in evaluating the feasibility of telework arrangements from a federal, state and local tax perspective, among other topics. Register here.

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 P.L. 105-277 (and currently codified at 47 U.S. Code §151 note (Moratorium on Internet Taxes).

2 P.L. 114-125, Section 922.

3 Ohio Dept. of Taxn., ST 2020-01: Internet Tax Freedom Act Summary (June 2020).

4 Murphy v. National Collegiate Athletic Assn., 584 U.S. ___, No. 16-476 and 16-477 (May 14, 2018).

5 General Mills, Inc. v. Franch. Tax Bd., 146 Cal. Rptr. 3d 475 (Cal. Ct. App. 2012).

6 Microsoft Corp. v. Franch. Tax Bd., 139 P.3d 1169 (Cal. 2006).

7 The statute governing the corporation's procedural claim (Miss. Code Ann. 27-77-7(3) (2014 Miss. H.B. 799, §17)) has been amended to clarify that an agency's failure to timely pay or credit an uncontested overpayment to the taxpayer will "not result in the agency's appeal or cross-appeal being dismissed or judgment being entered granting the taxpayer the relief he requested."

8 RSMo § 144.605(6) (use tax); RSMo § 144.010.1(7) (sales tax).

9 The court noted that under the International Association of Assessing Officers standards, a measure of less than 90% is unacceptable.