Tax Developments
December 22, 2005
Federal Courts Affirm Toll Telecom Services Not Subject to Federal Excise Tax.
On December 9, 2005, the U.S. Court of Appeals for the District of Columbia Circuit
affirmed the District Court's judgment in
National Passenger Corp. vs. United States,
D.C. Cir., No. 04-5421, 12/9/05. The Court of Appeals agreed that the 3% Federal
Excise Tax is not due upon telephone calls for which the toll charge only varies by
time, and not by distance. The vast majority of toll telephone calls made today
are billed only upon the basis of the duration of the call and not upon the
distance between the individuals participating in the call.
More >>
December 14, 2005
Wisconsin Fuel and Electricity Exemption Replaces Manufacturers' Income Tax Credit.
Effective January 1, 2006, Wisconsin Statute § 77.54 (30)(a)(6) provides that "fuel and
electricity consumed in manufacturing tangible personal property" shall be exempt from
sales and use tax. This exemption, enacted by 2003 legislation, replaces the existing
manufacturers' income tax credit for sales and use tax paid on fuel and electricity.
More >>
December 9, 2005
United States Supreme Court Denies Writ of Certiorari in Missouri Local Use Tax Case.
On December 5, 2005, the petition for a
writ of certiorari was denied by the United States
Supreme Court for Kirkwood Glass Company v. Missouri Director of Revenue, Docket Number 05-452.
The court's refusal to review the case affirms the denial of a taxpayer's refund claim by the
Missouri Supreme Court holding that Missouri's statutes permitting local use taxes are
constitutional. The taxpayer, Kirkwood Glass, had sought a refund on the basis that its
purchases from out-of-state suppliers were taxed more heavily than purchases from certain
in-state suppliers.
More >>
October 10, 2005
Interest Rates Fall Effective September 1, 2005 for Texas Tax Refunds.
Interest is paid on refunds of tax collected by the Texas Comptroller of Public
Accounts only if the tax was paid on a report due beginning January 1, 2000.
Prior to this date, no interest was paid on such tax refunds. The rate of interest
paid on refunds was previously linked to the rate charged on delinquent taxes, which
is included in Texas Tax Code § 111.060.
More >>
October 4, 2005
United States Supreme Court Grants Writ of Certiorari in Cuno Case.
On September 27, 2005, the petition for
a writ of certiorari was granted
by the United States Supreme Court for the
DaimlerChrysler Corp., et al. v.
Cuno, Charlotte, et al. enjoined with Wilkins, Tax Commissioner, OH, et al.
v. Cuno, Charlotte, et al. (collectively "
Cuno").
More >>
September 27, 2005
Earned Surplus Throwback Takes a Hit From the Texas Court of Appeals.
On September 22, 2005, the Third District Court of Appeals (the "Court") issued a
substitute Opinion in
Home Interiors & Gifts, Inc. v. Strayhorn, No. 03-04-00660-CV,
2005 Tex. App. LEXIS 7788 (Tex. App.--Austin September 22, 2005) reversing the district
court's grant of summary judgment in favor of the Comptroller. The Opinion was issued
as a result of the grant of the taxpayer's Motion for Rehearing filed in response to the
original Opinion issued July 28, 2005.
More >>
August 25, 2005
The Reconstruction of Morton Buildings.
Use taxes are generally imposed upon the use or
consumption of an item in the state. The following article is a
compilation of state tax cases which argue the taxability of the
use tax imposed for the use of raw materials that were purchased
outside of the state, manufactured into components outside of
the state, and subsequently brought into the taxing state for
use or further processing by the taxpayer.
More >>
August 7, 2005
Earned Surplus Throwback Takes a Hit From the Texas Court of Appeals.
On July 28, 2005, the Third District Court of Appeals (the "Court") issued an
Opinion in
Home Interiors & Gifts, Inc. v. Strayhorn, No.
03-04-00660-CV, 2005 Tex. App. LEXIS 5908 (Tex. Ct. - App. July 28, 2005)
reversing the district court's grant of summary judgment to the Comptroller.
The primary issue involved is whether the earned surplus throwback provision of
the Texas franchise tax unconstitutionally burdens interstate commerce as a
result of unfairly apportioning the tax base.
More >>
July 19, 2005
Ohio Adopts Significant Tax Reform.
On February 8, 2005, during Ohio Governor Bob Taft's State of the State address
"Unleashing Ohio's Economic Potential," he called for "tax reform" and stated
that it was his "number-one priority." He went on to address the fact that Ohio
cannot be competitive with surrounding states under its current tax structure
and stated "Ohio's corporate tax is a nightmare. And we've got to fix it."
More >>
May 12, 2005
Indiana Governor Signs Tax Amnesty Bill.
Governor Mitch Daniels signed House Enrolled Act 1004 on May 12, 2005,
authorizing the Indiana Department of Revenue ("IDOR") to establish a tax
amnesty program providing for the waiver of unpaid interest, penalties, and
fees upon payment of unpaid listed taxes for tax periods ending before July 1,
2004. As a result, the IDOR is offering a tax amnesty period from September 15,
2005 to November 15, 2005.
More >>
March 1, 2005
Déjà Vu - Another Missouri Local Use Tax Challenge?
"…the case focuses on the discrimination against interstate commerce which may occur
if a Missouri purchaser makes an out-of-state purchase taxed at a higher rate than a
purchase from in-state…" "the courts will be asked to decide if Missouri's new
local use tax…violates the U.S. Constitution…"
(Tax Talk Article in The Asset,
April, 30, 1992, "Missouri's new local use tax faces constitutional challenge")
More >>
January 19, 2005
California Taxpayers Face Complex and Inequitable Tax Amnesty Program.
The recently announced California Amnesty Program is not just the typical opportunity
for non-filers to clean up outstanding liabilities. It is a double-edged sword that
can impact every company doing business in the state. Every company doing business in
California should carefully evaluate whether an amnesty filing is in their best interest.
Decisions must be made quickly, as the amnesty application period ends March 31, 2005.
More >>