Article by Jennifer Karpchuk and Katherine Noll on “2020: A Memorable Year in SALT”
In an article published in Tax Notes on December 21, 2020, Chamberlain Philadelphia-based Shareholder Jennifer Karpchuk and San Antonio-based Shareholder Katherine Noll discuss some of the good, the bad and the ugly state and local tax cases of 2020.
“In many ways 2020 has been quite a dismal year, it has actually brought some good news in the form of taxpayer wins that could have a lasting impact on state and local tax,” explain Karpchuk and Noll. “Yet, not to be outdone, taxpayer losses were also prevalent during 2020.”
Karpchuk and Noll further explain cases that held in taxpayers’ favor and declined to accept the revenue departments’ attempts to look through to the ultimate customer interpreting market-based sourcing laws; a case where taxpayer loss in Michigan declared companies in cities and states that use an origin-based test will need to evaluate and determine how to factor the work-from-home location where the employees are performing the service into their equation; a case in Massachusetts that addressed the question whether sales of subscriptions for three online software products (e.g. GoToMeeting) were subject to sales tax; amongst others.
“The good, bad, and ugly SALT decisions of 2020 have left taxpayers with important future considerations — from sourcing, to taxation of software and technology, to the First Amendment and due process clause of the U.S. Constitution,” said Karpchuk and Noll. “With many cases making the list currently on appeal, 2021 promises to be another interesting year in SALT.”
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