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A Long Time in the Making: Illinois (Finally) Proposes Draft Regulations to Clarify the Reasonable Compensation Deduction03/16/2017

In January 2017, the Department of Revenue took steps to clarify the scope of the Reasonable Compensation Deduction by proposing draft regulations. Despite the admirable intention of the Department, the proposed regulations nevertheless only seem to shine a dim flashlight on the opaque statute.

Another Dakota Takes on Physical Presence03/10/2017

On 3/16/17, the Sixth Judicial Court of South Dakota overturned the State?s recently-enacted remote sales tax law. In striking down the economic nexus standard, the court specifically stated that it was bound to follow the United States Supreme Court?s decision in Quill Corp. v. North …

Think Nationally Before You Act Locally – A Strategic SALT Litigation Tip02/14/2017

It is a well-known fact that the states have become more aggressive in their SALT litigation tactics. There are a number of factors to be considered when devising a multi-state litigation strategy.

No Ostrich Here: Qui Tam Victory for Taxpayer from the Illinois Appellate Court10/19/2016

The Illinois Appellate Court has, once again, determined that there was no "reckless disregard," by a taxpayer under the Illinois False Claims Act ("IFCA"), by failing to pay Illinois use tax on internet and catalog sales made into Illinois. The decision issued by the appellate court on October 17, 2016 in State of Illinois, ex rel, Beeler, Schad and Diamond,…

Administrative Court or Art Critic? Cook County’s Latest Attempt to Expand the Application of the Amusement Tax Ordinance10/17/2016

Recent developments with respect to the Cook County Amusement Tax should give all tax observers pause.

Factor Presence Nexus- Be Careful What You Wish For!09/14/2016

A recent Chief Counsel?s Ruling issued by the California Franchise Tax Board illustrates the issues and potential opportunities that arise as a result of adopting a factor presence nexus standard.

August 2016 Tax Credits & Incentives Update08/04/2016

HMB Tip of the Month: Given the fact that the fall election is right around the corner, we expect that there will be an uptick of activity in some markets, especially with negotiated incentives, while other markets will face a standstill, depending on the political landscape of the particular market.  Also, we also expect a flurry of activity during the lame…

Wine Seller Victory in Illinois Qui Tam Lawsuit09/04/2015

Wine sellers received a second positive update just this week in the qui tam winery lawsuits in the Circuit Court of Cook County, Illinois. With the help of some procedural maneuvering, we were successful in getting a qui tam winery case dismissed, with prejudice.

Encumbered by Illinois Qui Tam Litigation? A New Update from the Attorney General May Spell Relief for Some09/02/2015

If you are a Defendant in one of the infamous Illinois qui tam lawsuits related to tax on shipping and handling charges, there has been an important update.

Illinois Qui Tam Update: Where is the False Claim? Where is the Fraud?06/17/2015

Sadly, most qui tam defendants make the unappealing business decision to settle by paying extortion dollars, rather than having to proceed all the way to trial. Hopefully the State will step in to help soon or some positive legislation will pass, so this trend will …

City of Chicago Issues Guidance Regarding the Applicability of the Amusement and Transaction Taxes to Electronic Transactions06/12/2015

On June 9, 2015, the Chicago Department of Finance (“Department”) issued two rulings regarding the City’s Amusement Tax and the Personal Property Lease Transaction Tax. The rulings are intended to clarify the City’s position on when electronically delivered amusements or services will be subject to …

Illinois Qui Tam Update: April Brings Blows to the Whistleblower – But Will It Continue?05/06/2015

The month of April (2015) brought us two of the more significant updates in the 10-year history of the Stephen B. Diamond (“Diamond”) whistleblower lawsuits, filed under the Illinois False Claims Act (the “Act”), 740 ILCS ?175/1et seq…

State Tax Developments for Pass-Through Entities: Apportionment of Income for Corporate Partners03/17/2015

State taxation of corporate partners in multistate partnerships raises interesting issues. In many circumstances, the corporate partner is subject to multistate taxation and is therefore engaged in the process of allocating and apportioning its income on a multistate basis. The difference between allocating and apportioning …

Myths and Considerations Regarding Market Based Sourcing02/18/2015

This is the myth that states are touting these days: market based sourcing is more easily administered and it levels the playing field between in-state and out-of-state businesses. A flood of states are jumping on the bandwagon. In the past week alone, the Tennessee and …

The Transferability and Monetization of Tax Credits01/28/2015

State tax credits have been in existence since the 1980s and can be found in 46 states. The credits offer a "dollar-for-dollar reduction" of a taxpayer's tax liability. However, the problem encountered early on in the promotion of these credits was what to do if the credit could not be fully utilized by the taxpayer. Transferability allows tax credits to remain attractive to…

Tax Deficiencies and Automatic Penalties: Challenging by Reasonable Cause?12/12/2014

Increasingly, taxpayers are seeing the imposition of penalties on deficiency assessments. In fact in a number of situations the imposition of the penalty is automatic upon the issuance of the assessment. The penalties, which may range from 20% to 25% of the liability, are imposed …

Maryland v. Wynne: Sammy Sosa’s Revenge?11/05/2014

Some have called it the most important state and local tax case that the United States Supreme Court has heard in 20 years. The case is Maryland v. Wynne and it concerns the extent to which a state must provide credits for taxes paid to …

Taxpayer Bills of Rights and Alternative Apportionment10/22/2014

The applicability of the Tennessee Taxpayer Bill of Rights to the Vodafone decision is not unique. In many cases, departments of revenue invoke alternative apportionment at a later stage than taxpayer bills of rights permit. Taxpayers should be wary of such treatment, and consider whether …

Taxing and Legitimizing the Sharing Economy08/26/2014

The so-called ?sharing economy? has recently gained a lot of steam. This model, which helps owners of nascent high value assets pair up with possible users of those assets, has been cited among the most dynamic and exciting types of start-ups over the past few …

Michigan IBM Decision May Provide More Opportunities Than the 3-Factor Election08/12/2014

On July 14, 2014, the Michigan Supreme Court ruled in IBM v. Department of Treasury, Docket No. 146440, that the taxpayer, IBM, was entitled to a refund of income taxes paid to the state by virtue of its election to apportion its income using the …

A Taxpayer Conundrum07/25/2014

What do Papa John?s Pizza, delivery charges and whistleblower lawsuits have in common? When it comes to state sales tax, a lot as it turns out.

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