Tax Developments
December 4, 2007
Michigan Legislature Passes House Bill 5408; Repeals Use Tax on Most Services.
In an unprecedented, yet expected, move, the Michigan Legislature reversed an
action taken two months ago. The Michigan Use Tax, on certain enumerated
services, has been repealed, effective 5:10 p.m., Saturday, December 1, 2007.
More >>
November 13, 2007
Arkansas Tax Opinions Subject to FOIA Disclosure.
The Supreme Court of Arkansas (“Court”) held on September 27, 2007, that legal opinions
issued by the Arkansas Department of Finance and Administration relating to Arkansas sales
taxes, issued under Gross Receipts Tax Rule GR-75, are public records that must be disclosed
under Arkansas Code Ann. § 25-19-103(5)(A) (Supp. 2005) with any and all facts that could
identify a person or entity fully redacted.
More >>
October 31, 2007
U.S. Supreme Court Grants Certiorari in MeadWestvaco Corp. v. Illinois Department of Revenue.
On September 25, 2007, the U.S. Supreme Court granted certiorari in the case of
MeadWestvaco Corp. v.
Illinois Department of Revenue1, a case concerning $1 billion in capital gains realized by the
petitioner when it sold the assets of a wholly-owned subsidiary in 1994, which had functioned
as an independent and separately managed business for more than 25 years.
More >>
August 29, 2007
Texas Court of Appeals' Decision in Home Interiors is Now Final.
The Comptroller has decided not to file a Petition for a Writ of Certiorari with the United
States Supreme Court, which would have been due on August 29, 2007. As a result, the Court
of Appeals’ Opinion in
Home Interiors is now final.
More >>
July 18, 2007
Michigan Legislature Passes Replacement Tax for Single Business Tax.
On July 2, 2007, the Michigan Legislature passed the long-awaited replacement tax
for the Single Business Tax (SBT), which is due to be repealed on December 31, 2007. There
are five bills related to this effort: Senate Bill 94 and House Bills 4369, 4370, 4371, and
4372. The bills enact a new tax to be called the Michigan Business Tax (MBT) and will provide
substantial personal property tax relief to Michigan businesses.
More >>
July 18, 2007
Missouri Governor Signs Tax Bills.
The recently concluded 94th legislative session produced 12 major tax bills signed by
Missouri Governor Matt Blunt. The bills include: Senate Bills 22, 30, 81, 86, 162, 233,
406, 497, and 577; and House Bills 444, 453, and 741.
More >>
June 22, 2007
Arkansas Emergency Rule 2007-5 Reduces Sales Tax Rate for Natural Gas or Electricity.
Beginning July 1, 2007, sales of electricity and natural gas to a manufacturer for direct use in
the manufacturing process will be taxed at a reduced rate of four and one-half percent (4.5%)
through June 30, 2008 (Act 185 of 2007). Beginning July 1, 2008, the state tax rate will be
four percent (4%). Local tax rates will remain as levied by the local governments and are
not subject to any reductions.
More >>
June 20, 2007
Texas Governor Signs Tax Bills.
The recently concluded 80th legislative session effected several major tax bills signed
by Texas Governor Rick Perry prior to the June 17, 2007 constitutional deadline for
gubernatorial action on legislation adopted during session.
More >>
June 20, 2007
Texas Limited Partnerships and Non-Corporate Business Entities Qualify for One-Time Margin Tax Savings.
For the first time, House Bill 3 will subject many non-corporate business entities, such as limited
partnerships, limited liability partnerships, grantor trusts, and general partnerships owned by
corporations, to the new Franchise Tax (a.k.a. Margin Tax) effective for reports due on or after
January 1, 2008. If one of these entities becomes subject to the Margin Tax on January 1, 2008,
its accounting year for computing the new tax can begin as early as June 1, 2006, if it is a
fiscal-year taxpayer, or January 1, 2007, if it is a calendar-year taxpayer.
More >>
June 7, 2007
Louisiana Board of Tax Appeals’ Decision on Prescription Confirmed by 19th Judicial District Court.
The 19th Judicial District Court confirmed the Louisiana Board of Tax Appeals' (“Board”) decision on
prescription for a chemical plant in Louisiana in
Formosa Plastics Corporation, Louisiana v. Secretary,
Cynthia Bridges, Department of Revenue.
More >>
May 31, 2007
Iowa Governor Signs Tax Amnesty Act.
Iowa Governor Chet Culver signed the Iowa Tax Amnesty Act of 2007 aimed at collecting
delinquent taxes owed by Iowa taxpayers. The Tax Amnesty Program (“Program”) will
run from September 4, 2007 through October 31, 2007, during which time taxpayers can
pay past due taxes in full and receive waiver of penalty and pay one-half of regular
interest charges normally assessed and will not be subject to civil penalties or criminal
prosecution.
More >>
May 31, 2007
Texas Legislature Adjourns 80th Session.
The Texas Legislature made important changes to the state’s new Margin Tax before adjourning
its 80th legislative session on May 28, 2007. Beyond the Margin Tax corrections, the
Legislature’s work this session on tax matters was marked more by what it rejected than
what it passed.
More >>
May 17, 2007
Texas Third Court of Appeals Reverses Grant of Taxpayer's Motion for Summary Judgment; Independently Procured Insurance Tax Invalid.
On May 1, 2007, the Texas Third Court of Appeals ("Court") reversed the Travis County
District Court's grant of the taxpayer's Motion for Summary Judgment, which held that
the independently procured insurance tax (IPIT) is invalid because it violates the
McCarran-Ferguson Act (15 U.S.C.A. Sec. 1011-15).
More >>
May 4, 2007
Texas Franchise Tax "Technical Corrections" Bill Approved by the Texas House of Representatives.
The Texas Franchise Tax (a.k.a. Margin Tax) “Technical Corrections” bill was passed by
the Texas House of Representatives (the "House") on May 2, 2007 and is now on its way to the Senate. The new
Margin Tax, which is effective for tax returns filed in 2008, is based on deducting the
taxpayer’s choice of either cost of goods sold (COGS) or compensation from total revenue.
More >>
May 1, 2007
Court of Appeals of Georgia Exempts Repair and Replacement Parts Used Directly in Manufacturing.
The Court of Appeals of Georgia (“Court of Appeals”) reversed the trial court’s decision
and ruled in favor of Owens Corning in
Owens Corning v. Georgia Department of Revenue.
More >>
April 25, 2007
Texas Launches New Amnesty Program: Project Fresh Start.
Texas Comptroller of Public Accounts Susan Combs (“Comptroller”) launched Project Fresh Start,
an amnesty program aimed at collecting delinquent taxes owed by Texas businesses. The amnesty
program will run from June 15, 2007 to August 15, 2007, during which time taxpayers can pay
past due taxes in full and receive waiver of penalty and interest charges normally assessed.
More >>
March 30, 2007
Texas Lawmakers Propose Major Enterprise Zone Program Changes.
The Texas Legislature is considering three bills that would significantly affect the
ability of a business to qualify for sales and use tax refunds under the state’s Enterprise
Zone Program.
More >>
March 27, 2007
Texas Supreme Court Denies Petition for Review in Home Interiors.
On March 9, 2007, the Texas Supreme Court denied the Comptroller's petition for review. The Third
Court of Appeals found that the earned surplus throwback provision of the Texas franchise tax
unconstitutionally burdens interstate commerce as a result of unfairly apportioning the tax base.
See
Home Interiors & Gifts, Inc. v. Strayhorn, 175 S.W.3d 856 (Tex. App.--Austin 2005, pet. denied).
More >>
March 12, 2007
Texas Franchise Tax "Technical Corrections" Bill Filed March 9th.
The much anticipated Texas Franchise Tax (a.k.a. Margin Tax) “Technical Corrections” bill was filed
on March 9, 2007. The new Margin Tax, which is effective for tax returns filed in 2008, is based
on deducting the taxpayer’s choice of either cost of goods sold (COGS) or compensation from total
revenue.
More >>
March 9, 2007
Illinois Governor Blagojevich Proposes New Gross Receipts Tax.
During his 2007 budget address on March 7th, Governor Blagojevich announced
his intention to impose new taxes on businesses, estimated to raise $7 billion, to
fund a comprehensive health care plan labeled “Illinois Covered.”
More >>
February 19, 2007
Texas Comptroller Implements New Procedures in Tax Hearings.
Recently, the Texas Comptroller of Public Accounts (Comptroller) transferred the
administrative law judges (ALJs) from her office to a separate agency, the State
Office of Administrative Hearings (SOAH). As an immediate consequence, oral
hearings scheduled for January and February have been postponed pending the
development of new procedures and rules to govern the administrative hearings process.
We expect the delayed hearings to be rescheduled in the near future.
More >>
January 23, 2007
Business Taxes Again on the Agenda as Texas Legislature Reconvenes.
As the Texas Legislature opened its 80th session, business taxes are once again at the
top of its agenda. Over the next five months, lawmakers are expected to consider
numerous clarifications and revisions to the new franchise tax adopted last spring,
residential property tax reforms, and other proposals, including one to authorize
private companies to collect some taxes.
More >>
January 17, 2007
Texas Comptroller Susan Combs Transfers Administrative Law Judges to State Office of Administrative Hearings.
Effective January 3, 2007, the Texas Comptroller of Public Accounts (Comptroller)
transferred the administrative law judges to the State Office of Administrative
Hearings (SOAH). Comptroller Susan Combs announced that removing the judges
from the umbrella of her office would ensure that they remain independent, fair,
and impartial when presiding over tax hearings.
More >>