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October 4, 2023

State and Local Tax Weekly for September 15 and September 22

Ernst & Young's State and Local Tax Weekly newsletter for September 15 and September 22 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.


Ohio Board of Tax Appeals addresses construction of CAT situsing rule for sales of tangible personal property

The Ohio Board of Tax Appeals (BTA) recently issued decisions in two cases — VVF Intervest, LLC1 and Jones Apparel Group/Nine West Holdings2 — that involved refund claims focused on the application of ORC 5751.033(E), the Commercial Activity Tax (CAT) rule governing situsing sales of tangible personal property. The BTA’s decisions provide important guidance on the application of the situsing rule and the burden of proof taxpayers must meet to establish the situsing location. Most importantly, the BTA’s decisions reject an extra-statutory requirement that the taxpayer know the final destination of goods at the time of sale.

ORC 5751.033(E) – situsing sales of tangible personal property: ORC 5751.033(E) requires gross receipts from the sale of tangible personal property to be sitused to Ohio if the property is received in Ohio by the purchaser. The statute further provides, in relevant part, that in “the case of delivery of tangible personal property by motor carrier or by other means of transportation, the place at which such property is ultimately received after all transportation has been completed shall be considered the place where the purchaser receives the property.” In applying the situsing statute, the Ohio Department of Taxation (Department) relied on guidance it issued in 2005 imposing an additional requirement that the location of shipment must be “known by the seller at the time of the sale”.

The BTA noted that, because the CAT situsing rule was similar to that employed by the defunct Corporation Franchise Tax, the BTA, Ohio courts and the Department have been guided by court decisions that focused on where tangible personal property was ultimately received. Those decisions concluded that goods should not be sourced to Ohio “simply because Ohio was one stop in a singular delivery process to a purchaser” or when there is a dock sale where the customer picks up goods in Ohio, either via its own trucks or common carrier, for transport outside Ohio.3 The BTA also observed that it has directly interpreted ORC 5751.033(E) and, in all of those cases, it concluded that the taxpayer did not meet its evidentiary burden to show that Ohio was “merely a pit stop” and not the place where property was delivered to the purchaser after all transportation was completed.4

VVF Intervest: VVF Intervest (VVF) is a contract manufacturer of personal care products located in Kansas. VVF’s largest customer (Company X) placed monthly orders with VVF based on demand forecasts. Company X contracted with third parties to transport goods from VVF’s Kansas facility to one of three distribution centers, one of which was in Ohio. These distribution centers were owned and operated by unrelated third parties. Company X held about two months of inventory at the Ohio distribution center, and when one of its retail customers, placed an order, it would use its third-party transportation provider to transport the product to the retail customer’s distribution center. Goods from the Ohio distribution center were usually sent to retailer facilities in the Eastern United States.

VVF filed a refund claim for CAT paid on receipts from sales of bar soap. The Department denied the refund claim and VVF appealed to the BTA. At the BTA hearing, VVF presented testimony from its Chief Operating Officer who authenticated reports created for Company X's management showing the ultimate destination of the units of soap. VVF also presented testimony from Company X indicating that the product was not ultimately delivered in Ohio. VVF argued that because the goods were shipped to the Ohio distribution center for future shipment, it was an interim stop within the distribution chain. Accordingly, the Ohio distribution center was not the location where Company X ultimately received the goods after all transportation was completed. The Department argued that the shipment from Company X's Kansas facility to the Ohio distribution center should be treated as its own taxable event. The second shipment from the Ohio distribution center to the retailer’s facilities outside Ohio should be treated as a separate taxable event. The Department emphasized VVF’s records and subjective knowledge at the time the soap left its Kansas facility showing that the soap was initially shipped into Ohio.

In evaluating the parties’ arguments, the BTA initially observed that neither ORC 5751.033(E), nor case law, supports the imposition of a requirement of contemporaneous knowledge of the ultimate destination at the time of sale. The BTA indicated that the case law, such as the Greenscapes case, stands for the proposition that if the only evidence available shows the products were shipped to Ohio, then they may be properly sitused to Ohio, while leaving open the possibility for a party to produce evidence proving that the goods at issue were ultimately received outside of Ohio. The BTA concluded that VVF met its burden of proof, by virtue of its customer's testimony and corroborating management reports, in demonstrating its sales to Company X were not ultimately delivered to the customer in Ohio. The BTA rejected the Department’s argument that the transportation between VVF and Company X ended at the Ohio distribution center because there was a second transaction, i.e., the sale by Company X to its retail customer. Instead, the BTA reasoned that ultimate delivery to Company X was not at the Ohio distribution center, but just one leg of Company X’s transportation and continuous delivery process. The BTA concluded that “Ohio does not become the ultimate delivery point simply because the bars are temporarily held there in a distribution center owned by an entirely unrelated third party.”

A partial dissenting opinion, while agreeing with the majority opinion’s rejection of a rule requiring a seller’s subjective knowledge of ultimate delivery at the time of sale, would have affirmed the Department on the ground that VVF’s receipts be sitused to the location where delivery was made to Company X. The application of the statute should not be expanded to “purchasers further down the supply chain.”

Jones Apparel Group/Nine West (Nine West): Nine West is a designer, marketeer and wholesaler of apparel, footwear, jewelry and other accessories, such as handbags. Nine West sells products through its retail locations, online and other major retailers. Nine West ships products to Ohio-based distribution centers of major retailers. Nine West paid CAT on receipts for all goods shipped to Ohio distribution centers, including those ultimately received by customers in locations outside of Ohio.

Like VVF, Nine West filed a refund claim, which was audited by the Department. Nine West provided shipping labels for each of the Ohio distribution centers. Some of the shipping labels had “mark-for” addresses, which tied to specific store numbers or locations as the ultimate shipping addresses. The Department allowed refunds for these sales because the “mark-for” addresses at the time of shipping were sufficient to prove that Nine West knew where the goods were going to be shipped at the time of the sale. Refunds were denied for sales to other retailers that did not have “mark-for” addresses or any other evidence showing Nine West knew the ultimate destination at the time of sale.

Nine West appealed the denied refund claim to the BTA and presented testimony from its Vice President and Assistant Treasurer who indicated that the company would hold meetings to discuss marketing campaigns, distribution methods and other information that tracked performance and sales trends and to see if customers’ retail stores were doing better than expected. This information helped with reorders. Nine West also presented testimony describing its use of business intelligence applications that determined cities (1) in which its retail customer was located, (2) which stores were in those cities, and (3) which products were available at each store. This information was intended to corroborate Nine West’s contention that it had knowledge of the ultimate destination of goods without a “mark-for” designation, but not necessarily from the time of sale.

The BTA first noted that subjective knowledge of the ultimate destination at the time of shipping was not required by ORC 5751.033(E). The BTA indicated that it could consider evidence provided by a taxpayer that shows the goods were ultimately received outside of Ohio. The BTA, however, concluded that Nine West did not meet its burden of proof in this case. The evidence presented by Nine West was based on data collected for periods outside of the period covered by the refund claim. The BTA said that “the data submitted…was too far removed and reflected too narrow a time frame to establish the goods…were ultimately received outside Ohio.”

For additional information on this development, see Tax Alert 2023-1628.

Nebraska district court denies dividend received deduction for IRC § 965(a) inclusion income

In Precision Castparts v. Nebraska Department of Revenue,5 the Lancaster County District Court (court) upheld a determination from the Nebraska Department of Revenue (Department) denying a taxpayer’s state dividend received deduction (DRD) for IRC § 965(a) inclusion income.

Background: Neb. Rev. Stat. § 77-2716(5) provides a subtraction adjustment for dividends “received or deemed to be received” from corporations not subject to the Internal Revenue Code. This provision was enacted in the mid-1980s as part of an overhaul of its corporate tax system in response to the Kellogg6 Nebraska Supreme Court decision. For over 30 years, subpart F income was treated as eligible for the DRD. In 2018, in response to changes made by the Tax Cuts and Jobs Act, specifically the one-time transition inclusion of IRC § 965(a), the Department revisited this practice and issued guidance denying DRD treatment to IRC § 965(a) income (see Tax Alerts 2019-0062, 2019-1639). In 2021, the Department supplemented this guidance in Revenue Ruling 24-21-1 (see Tax Alert 2021-0404), which discussed certain parts of subpart F that are expressly identified as dividends or deemed dividends by Congress and allowed a DRD for those items. Any other items of subpart F income would not be afforded DRD treatment according to the guidance.

The taxpayer filed a refund claim related to its inclusion of deemed repatriated income under IRC § 965(a) on its amended 2017 return. The Department denied the refund claim and the taxpayer appealed the decision.

Court denies refund claim: In upholding the Department’s denial of the refund claim, the court was not persuaded by the taxpayer’s reliance on the legislative history of Nebraska’s DRD, which, in the context of the general restructuring of its corporate tax system, was intended to reflect a “total domestic approach.”7 The court viewed the one-time repatriation of deferred controlled foreign corporation earnings as an event that could not have been considered by the legislature in 1984. Instead, the court focused on the language of the statute and distinguished a “dividend” — a distribution from a corporation out of its earnings and profits — from an increase in federal subpart F income due to a new “inclusion” in IRC § 965(a). Finally, the court rejected the taxpayer’s argument that the IRC § 965(a) inclusion was a deemed dividend. The court appeared to accept the Department’s argument that a “deemed dividend” is an item of income that does not meet the definition of a dividend, but which Congress expressly says should be treated as a dividend. The court noted that neither the Internal Revenue Code nor the federal Treasury Regulations deem IRC § 965(a) inclusion income as dividend income. For more on this development, see Tax Alert 2023-1572.


Federal: In Notice 2023-63 (Notice), released Sept. 8, 2023, the IRS and Treasury Department have described rules that the IRS is considering for inclusion in proposed regulations under IRC § 174, as amended by the TCJA. The guidance also covers the treatment of specified research or experimental (SRE) expenditures under IRC § 460, as well as the application of IRC § 482 to cost-sharing arrangements that involve SRE expenditures. And, in its recent guidance on the cost recovery of SRE expenditures under IRC § 174 (Notice 2023-63, the Notice), the IRS outlines two rules on how to apply the amortization deduction to unamortized SRE expenditures for SRE property, if that property is disposed, retired or abandoned when a corporation ceases to exist. For more on these developments, see Tax Alerts 2023-1526 and 2023-1535.

Arkansas: New law (SB 8), effective for tax years beginning on or after Jan. 1, 2024, reduces the top income tax rates imposed on corporations and foreign corporations to 4.8% (from 5.1%), and reduces the top income tax rate imposed on individuals, estates and trust to 4.4% (from 4.7%). Ark. Laws 2023 (1st Extra. Sess.), Act 6 (SB 8), signed by the governor on Sept. 14, 2023.

California: New law (SB 143 ) extends the exclusion from gross income for grant allocations received by corporate and individual taxpayers from the California Microbusiness COVID-19 Relief Program administered by the Office of Small Business Advocate through 2024 (from 2022). Cal. Laws 2023, ch. 196 (SB 143), signed by the governor on Sept. 13, 2023.

Iowa: On Sept. 22, 2023, the Director of the Iowa Department of Revenue issued Order 2023-02, certifying that the top corporate income tax rates will decrease to 7.1% in 2024 from 8.4%. The 7.1% rate applies to corporate income exceeding $100,000. For more on this development, see Tax Alert 2023-1603.

New Jersey: In response to recently enacted corporation business tax (CBT) reform, the New Jersey Division of Taxation (Division) has issued (1) revised guidance on changes that govern the net deferred tax liability deduction that were codified by ch. 96, N.J. Laws 2023 – TB-96(R), revised Sept. 19, 2023; (2) guidance on the CBT treatment of GILTI for privilege periods ending on and after July 30, 2023 – TB-110 (Sept. 12, 2023); (3) revised guidance on IRC §§ 951A and 250, including the sourcing of GILTI and foreign-derived intangible income under the CBT Act for privilege periods ending before July 31, 2023 – TB-92(R), revised Sept. 12, 2023; and (4) revised guidance on the exclusion of double inclusion of GILTI and the treatment of related-party addback modifications for privilege periods ending before July 31, 2023 – TB-88(R), revised Sept. 12, 2023.

North Carolina: In response to a ruling request, the North Carolina Department of Revenue determined that a company’s contract manufacturing service fees received from its foreign parent should be sourced to North Carolina if the finished product is ultimately delivered by a related entity to a customer located in the state. If the company is not provided the ultimate destination and cannot determine the locations where the products are ultimately delivered, then the service fees should be sourced to North Carolina, the location where the company performs the contract manufacturing services. N.C. Dept. of Rev., PLR 2023-02 (June 20, 2023).

Tennessee: The Tennessee Department of Revenue's Hearing Office upheld a franchise and excise tax assessment against an out-of-state manufacturer because an engineer was providing services from his Tennessee home office. The Hearing Office held that the company is subject to Tennessee's franchise and excise taxes because its annual sales met the nexus standard under the "bright-line presence" test, in this case sales exceeding $500,000 per year, and the engineer performing services from his Tennessee home office was not engaged in activities involving sales solicitation; therefore, the company cannot claim an exemption under P.L. 86-272. For more on this development, see Tax Alert 2023-1551.

Virginia: New law (HB 6001 ) increases the Virginia corporate income tax deduction for business interest to 50% (from 30%) of the business interest disallowed as a deduction under IRC § 163(j), effective for tax years beginning on and after Jan. 1, 2024. Va. Laws 2023 (Special Sess. 1), ch. 1 (HB 6001), signed by the governor on Sept. 14, 2023.


Louisiana: The Louisiana Sales and Use Tax Commission for Remote Sellers (Commission) issued a bulletin to provide guidance on tax collection and remittance requirements for Louisiana merchants that make sales through marketplace facilitators or directly to consumers. Marketplace facilitators are the dealer responsible for collecting and remitting sales tax for all remote sales occurring on its marketplace; remote sales include those made by a Louisiana merchant through a marketplace facilitator. A marketplace seller’s physical presence in Louisiana does not preclude it from being considered a remote seller. For these sales, the Louisiana merchant/marketplace seller can rely on the marketplace facilitator to collect and remit sales tax to the Commission on their behalf. In addition, the marketplace facilitator is required to maintain documentation from the marketplace seller used to determine the taxability of the facilitated sale, such as exemption certificates. The Commission noted that this guidance applies to marketplace facilitators that have a physical presence in Louisiana. A Louisiana merchant that makes sales on a marketplace as well as directly to consumers, is responsible for collecting and remitting state and local sales tax on the direct sales that do not occur on a marketplace. La. SUT Comm. for Remote Sellers, Remote Seller Information Bulletin No. 23-001 (Sept. 8, 2023).

Michigan: The Michigan Department of Treasury has updated guidance on the application of sales and use tax to delivery and installation charges to reflect changes to the law enacted in 2023. Generally, delivery and installation charges are excluded from the tax base if such charges are separately listed on documents given to the purchaser and the seller’s books and records show separately the transactions used to determine the amount of sales/use tax that will be imposed. The guidance (1) defines delivery and installation charges, (2) explains which of these charges are/are not subject to sales/use tax, (3) explains when a utility’s charges for transmission and distribution are subject to sales/use tax, (4) describes the tax treatment of a delivery charge for a shipment of taxable items and exempt items, and (5) explains tax relief the 2023 law change provides to taxpayers – i.e., the cancellation of outstanding balances for delivery and installation charges on notices of intent to assess or on final assessments issued before the effective date (April 26, 2023) of the law change. The guidance includes examples. Mich. Dept. of Taxn., RAB 2023-16 “Sales Tax and Use Tax – Taxability of Delivery and Installation Charges” (Sept. 11, 2023) (replaces RAB 2015-17).

Rhode Island: In response to a ruling requestion, the Rhode Island Division of Taxation (RI DOT) determined that a company’s charges for its online educational courses, which are stored on cloud servers, are subject to Rhode Island sales tax. The RI DOT said that tax applies to the extent the company charges Rhode Island customers for access to these online courses and software services.8 R.I. Div. of Taxn., Ruling Request No. 2023-02 (Sept. 5, 2023).

Virginia: New law (HB 6001) reestablishes the sales and use tax exemption holidays for certain energy and water efficient qualified products, school supplies, clothing and footwear and certain hurricane preparedness equipment. These holidays will run during specific periods through July 1, 2025; however, the holiday authorized for 2023 only will apply to sales occurring during the three-day period beginning on Friday, October 20 and ending at 11:59 p.m. on Sunday, October 22. Va. Laws 2023 (Special Sess. 1), ch. 1 (HB 6001), signed by the governor on Sept. 14, 2023. For a list of eligible products, see Va. Dept. of Taxn., Release “Virginia Sales Tax Holiday Runs October 20-22, 2023” (Sept. 2023).


Federal: On Sept. 14, 2023, the IRS announced (IR-2023-169) in a news release that it was immediately pausing processing of new claims for the employee retention credit (ERC) through at least the end of the year due to continuing concerns about improper claims. The IRS said it was continuing to work on ERC claims that the agency received before the moratorium, but the standard processing goal will go from 90 days to 180 days. Many claims will face additional scrutiny, with the IRS saying it could request documentation to make sure claims are legitimate. Due to the volume of claims, individual claims will not be expedited. The IRS is in the process of implementing a settlement program that will allow employers to repay erroneous refunds and a claims withdrawal program that will allow employers to withdraw their claims before they receive the refund. For additional information on this development, see Tax Alert 2023-1561.

Kansas: The Kansas Department of Revenue (KS DOR) issued guidance on the tax credit for qualified low-income housing projects, which was created during the 2022 legislative session and can be claimed starting in 2023. The tax credit is available for each qualified development in an amount equal to the federal tax credit allocated or allowed by the Kansas Housing Resources Corporation (KHRC) to the qualified development. The KHRC is required to issue allocation certificates to owners of a qualified development receiving a credit under the Affordable Housing Tax Credit Act. Pass-through entities that are owners of a qualified development and receiving the credit are allowed to allocate the credit among its partners and members in an agreed upon manner. Excess credits are not refundable but can be carried forward for up to 11 years following the tax year in which the allocation was made. The KHRC will determine a taxpayer’s eligibility for a tax credit and will allocate the credits in accordance with IRC §42. The credits are subject to recapture if any portion of the federal tax credits taken on a qualified development is recaptured. The KS DOR noted that recapture or disallowance of the credit will increase qualified taxpayer’s tax liability and it is included on the taxpayer’s return for the tax year in which the recapture or disallowance event was identified. Kan. Dept. of Rev., Notice 23-08 “Kansas Affordable Housing Tax Credit Act” (Sept. 6, 2023).


Wisconsin: The Wisconsin Department of Revenue (WI DOR) issued frequently asked question (FAQs) regarding the personal property tax exemption that takes effect Jan. 1, 2024. The exemption applies to personal property defined in Wis. Stats. § 70.04 and steam and other vessels, furniture and equipment. The exemption does not apply to (1) real property; (2) buildings, improvements and fixtures on leased land, exempt land, forest cropland and managed forestland assessed as real property; (3) real property assessments of manufactured and mobile homes; and (4) utility property subject to taxation under Wis. Stats. §76.025(2). The exemption does not impact 2023 personal property tax bills payable in 2024 or to the collection of tax assessments for omitted personal property or the correction of personal property errors. The FAQs (1) describe how to determine if property is taxable real property or exempt personal property; (2) discuss assessment of real property previously assessed as personal property; (3) describe how to assess buildings, improvements and fixtures when on exempt land; (4) explain how a parcel is created and how it is listed on the roll with only an improvement assessed value; and (5) discuss the taxability of manufactured and mobile homes. Wis. Dept. of Rev., Webpage: Personal Property Exemption Common Questions Available Online” (Sept. 19, 2023).


Georgia: The Georgia Department of Revenue (GA DOR) announced that it is extending certain return and payment deadlines for taxpayers impacted by Hurricane Idalia. Affected taxpayers that have a valid extension until Oct. 16, 2023 to file their 2022 returns will have until Feb. 15, 2024 to file their return. Payments for 2022 returns that were due April 18, 2023 are not eligible for this relief. In addition, the Feb. 15, 2024 extension applies to the following: (1) quarterly estimated tax payments due Sept. 15, 2023 and Jan. 16, 2024; (2) quarterly payroll and excise tax returns due Oct. 31, 2023 and Jan. 31, 2024; (3) calendar-year partnership and S corporations whose extensions expired on Sept. 15, 2023, corporations whose 2022 extensions expire on Oct. 16, 2023 and exempt organizations whose extensions expire on Nov. 15, 2023. The relief also applies to certain sales and use tax return filing, tax payment and other time-sensitive acts. The GA DOR noted various filing and payments for which the extended deadlines for filing and payments do not apply, such as information returns for W-2 and 1099 series. Paper returns should include “Hurricane Idalia” across the top of any forms submitted to the GA DOR. Relief is available to taxpayers in the following counties: Appling, Atkinson, Bacon, Berrien, Brantley, Brooks, Bulloch, Camden, Candler, Charlton, Clinch, Coffee, Colquitt, Cook, Echols, Emanuel, Glynn, Jeff Davis, Jenkins, Lanier, Lowndes, Pierce, Screven, Tattnall, Thomas, Tift, Ware and Wayne. Ga. Dept. of Rev., Press Release “DOR Announces Tax Relief for 28 Counties Impacted by Idalia” (Sept. 14, 2023).


Multistate: The 2023 edition of our US employment tax rates and limits report is now updated through Aug. 25, 2023, to reflect changes in state paid family and medical leave insurance, state unemployment insurance and state income tax rates. For more on this development, see Tax Alert 2023-1520.

Multistate: EY's Employment Tax Advisory Services group has developed a publication summarizing the latest employment tax and other payroll developments in an easy-to-read format. Developments in US federal, state and local payroll and human resources matters are highlighted, as are our insights to improve US employment tax and payroll compliance. For more on this development, see Tax Alert 2023-1518.

Arkansas: On Sept. 14, 2023, Governor Sarah Huckabee Sanders signed into law SB 8 , which, effective Jan. 1, 2024, lowers the top personal tax rate from 4.7% to 4.4% and reduces the supplemental rate of withholding on bonuses and other irregular wage payments from 4.7% to 4.4%. The law also provides for a non-refundable income tax credit of up to $150 for individual taxpayers and up to $300 for married taxpayers for tax year 2023. For additional information on this development, see Tax Alert 2023-1569.

Illinois: New law (HB 2068) creates the Transportation Benefits Program Act, which, effective Jan. 1, 2024, requires Illinois employers with 50 or employees in designated transit zones provide transit benefits to their covered employees. For additional information on this development, see Tax Alert 2023-1558.

Texas: On Aug. 30, 2023, the Texas District Court for Travis County ruled in favor of Houston in a lawsuit against Texas asserting that parts of HB 2127 are unconstitutional, overly vague and unenforceable (City of Houston v. Texas, DC TX, Dkt. No. D-1-GN-23-003474, Aug. 30, 2023). The court held that absent a severability clause, the state is enjoined from enforcing the legislation in its entirety. Dozens of local officials signed onto an amicus brief in support of the lawsuit. The Texas Attorney General (TAG) issued a press release on Sept. 1, 2023, confirming that, despite the ruling of the Texas District Court, HB 2127 went into effect on Sept. 1, 2023. The TAG explained that the District Court's decision "does not enjoin enforcement of the law by Texans who were not parties to Houston's suit and who were harmed by local ordinances, which HB 2127 preempts." For additional information on this development, see Tax Alert 2023-1501.


District of Columbia: New law (B25-0202) temporarily increases the rate of the additional sales and use tax imposed on gross receipts for transient lodgings or accommodations. Effective for the period beginning April 1, 2023 to March 31, 2027 the rate of tax is increased to 1.3% (from 0.3%). Thus, for this time period, the total sales and use tax rate on gross receipts for transient lodgings or accommodations is 15.95% (from 14.95%). (This change was previously enacted as part of emergency and temporary legislation.) D.C. Laws 2023, L25-0050 (A25-0176; B25-0202), became law on Sept. 6, 2023.


International – Uruguay: In Decree 271/023, the Uruguay 's Executive Power extended the end date for the period during which a reduced value-added tax (VAT) rate applies (13% rather than 22%) from Sept. 30, 2023 to April 30, 2024. For more information, please see Tax Alert 2023-1553.


Thursday, October 5. Refocusing on the global trade functional organization - A global trade perspective (1:00–2:00 p.m. ET New York; 10:00–11:00 a.m. PT Los Angeles). As a result of multiple years of trade disruption and geopolitical tensions, companies are recalibrating, refocusing and re-establishing their interest in their global trade function’s organizational design. Global trade professionals have navigated higher customs duty costs, increased complexity from the ever-changing regulatory environment, and a need for increased operational efficiencies to help reduce supply chain delays. This webcast accompanies our recent report Refocusing on the global trade functional organization — a global trade perspective’ and will share the benchmarking results of peer global trade professionals on how they are organizing their global trade functions to be more efficient, reduce customs duty costs and effectively manage risks, also taking into consideration technology advancements. Some of the questions that will be explored include: What should be the scope of the global trade function? Where should global trade sit within the company – Tax, Legal, Finance, Supply Chain? Should operational activities be separated from compliance activities? How can the global trade function contribute to the company’s overall operational efficiency? Register.

Tuesday, October 17. How transferable tax credits are changing the tax landscape (1 pm ET). The Inflation Reduction Act (IRA) introduced federal transferable tax credits. Since then, we have been fielding a lot of questions from our clients about buying and/or selling transferable tax credits. The webcast will cover many of these FAQs, including which tax credits are transferable, an update on the contents of the recently released proposed regulations and how the transfer process works. We will also cover some considerations for both buyers and sellers. In addition, the panelists will provide an update sharing what we are seeing in the market related to supply and demand, pricing, terms, etc. Finally, we will help people get familiar with a typical transfer process and what parties can do to help facilitate transactions.Register.

Wednesday, October 18. Business impacts of sustainability and ESG tax policies (1 pm ET). Governments around the world are increasingly using tax policy to encourage clean and renewable energy investment and to help regulate carbon, plastics and other consumption/emissions-based market activities. Government policies and ambitious sustainability goals from both the public and private sector have put environmental, social and governance (ESG) issues at the forefront of business conversations. Join us for the first in a quarterly series of webcasts discussing the role of tax in sustainability and how it can impact businesses’ ESG strategy and operations. Topics will include: (1) the impact of sustainability on business and tax operations; (2) the sustainability tax landscape and (3) the legislative and tax policy emphasis on climate change. Register

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 VVF Intervest, LLC v. Harris, Case No. 2019--1233 (Ohio Bd. Tax App. Sept. 13, 2023).

2 Jones Apparel Group/Nine West Holdings v. McClain, Case Nos. 2020-53, 2020-54 (Ohio Bd. Tax App. Sept. 15, 2023).

3 See House of Seagram v. Porterfield, 271 N.E.2nd 827 (1971), Dupps Co. v. Lindley, 405 N.E.2nd 716 (1980), Loral Corp. v. Limbach, BTA Case Nos. 85-C-914, et al. (1988).

4 See Greenscapes Home & Garden Prods. v. Testa, 2019-Ohio-384, 129 N.E.3d 1060 (10th Dist.), Mia Shoes, Inc. v. McClain, BTA No. 2016-282 (2019), Henry RAC Holding Corp. v. McClain, BTA No. 2019-787 (2020).

5 Precision Castparts v. Nebraska Department of Revenue, CI122-2106 (Neb. Dist. Ct., Lancaster Cnty., July 3, 2023).

6 Kellogg Company v. Herrington, 343 N.W.2d 326 (Neb. 1984).

7 See Larry D. Hause, Unitary Taxation: An Analysis of State Taxation of Multijurisdictional Corporations in Nebraska, 64 Neb. Law Rev. 135, 188 (1985).

8 Under Rhode Island law, “[i]nfrastructure as a service (“IaaS”), platform as a service (“PaaS”), and software as a service (“SaaS”) are taxable as long as there is a charge to a Rhode Island customer for the use of the virtual infrastructure, platform, or for software that is accessed through the internet or on a vendor-hosted server.” See, R.I. Gen. Laws §§44-18-7(15), 44-18-8, 44-18-18 and 44-18-12(a).