case court tax type principal issue
TRANSCRIPT
1
State Tax Cases
Case Court Tax Type Principal Issue Arkansas v. Farm Credit Services
520 U.S. 821 (1997)
U.S. Supreme Court (AR)
Income Tax Injunction Act - Exceptions for U.S. instrumentalities
Significance: Construed exceptions from Tax Injunction Act for U.S. instrumentalities
ASARCO v. Idaho State Tax Comm’r
458 U.S. 307 (1982)
U.S. Supreme Court (ID)
Income Unitary - Whether affiliates were engaged in a unitary business
Significance: One of only two taxpayer victories in a unitary business case (see above)
Missouri v. CoBank
531 U.S. 316 (2001)
U.S. Supreme Court (MO)
Income Federal Supremacy/Comity - Whether a federal instrumentality is exempt from state income tax
Significance: Narrowed scope of McCulloch v. Maryland
Quill Corp. v. North Dakota
504 U.S. 298 (1992)
U.S. Supreme Court (ND)
Use Nexus - Whether the Constitution requires physical presence in a taxing state as a predicate to use tax collection liability
Significance: Landmark case establishing physical presence requirement
Woolworth v. Taxation and Revenue Dept. of New Mexico
458 U.S. 354 (1982)
U.S. Supreme Court (NM)
Income Unitary - Whether affiliates were engaged in a unitary business
Significance: One of only two taxpayer victories in a unitary business case (see below)
City of Birmingham v. Orbitz, Inc. AL Supreme Court Circuit Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Siegelman v. Chase Manhattan Bank
575 So. 2d 1041 (1991)
AL Supreme Court
Financial Institution Excise Tax
Nexus - Whether nonresident financial institutions were taxable in Alabama as a result of the presence of credit card customers
Significance: Taxability held lacking on basis that Alabama had historically not imposed a tax on out-of-state national banks
Pine Bluff Advertising and Promotion Commission v. Hotels.com, L.P.
McAllister v. Hotels.com L.P. City of Fayetteville v. Hotels.com, L.P.
AR Circuit Courts
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
2
State Tax Cases
Case Court Tax Type Principal Issue Upjohn Company v. Arizona DOR
App. Dkt. No. TX1997-000438 (2003)
AZ Maricopa County Court
Income P.L. 86-272 - Whether in-state activities of employees were limited to those activities protected by the statute
American General Realty Investment Corp. v. Franchise Tax Board
CGC-03-425690 (2005)
CA Superior Court
Income Whether FTB could disallow interest expense of unitary group, two members of which received nontaxable dividend income from insurance subsidiaries
Significance: Taxpayer victory with Court awarded litigation costs in excess of statutory rate
CDA Cable v. Franchise Tax Board
CGC 01-402879 (2002)
CA Superior Court
Income Unitary; Business Income - Whether voting trust severed unity of ownership of a unitary group; ability of S corporation to file combined return; whether interest on installment note is apportioned in year of sale or of receipt
City of Los Angeles v. Hotels.com, L.P. Bush v. Cheaptickets, Inc. Montgomery v. Orbitz, LLC City of San Diego v. Hotels.com, L.P. City of Oakland v. Hotels.com, L.P. In re Transient Occupancy Tax Cases,
Coordination Proceedings (City of Anaheim)
In re Transient Occupancy Tax Cases, Coordination Proceedings (City of San Francisco)
City of Santa Monica v. Expedia, Inc.
CA Federal Court of Appeals District Court Court of Appeals Superior Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Fujitsu IT Holdings (Amdahl) v. Franchise Tax Board
120 Cal. App. 4th 459 (2004)
CA Court of Appeal
Income Apportionment - Taxability of distributions of previously taxed income in a water’s-edge group
Guy F. Atkinson
A0805075 (2000)
CA Court of Appeal
Income Credits - Whether credits generated pursuant to a combined report are available to all taxpayer members of the group
Mason Shoe Manufacturing Co. v. State Board of Equalization
A104964 (2004) CGC-02-411873 (2003)
CA Court of Appeal
Sales Nexus - Whether parent company of mail order subsidiaries is subject to California sales tax as a drop shipper
3
State Tax Cases
Case Court Tax Type Principal Issue MBIA Insurance Corporation v. State
Board of Equalization
CGC-99-308484 (2000)
CA Superior Court
Retaliatory Whether California’s retaliatory tax on insurance companies is constitutional
Mercury General Corporation
CGC 07-462688
(Closed)
CA Superior Court
Income Disallowance of expenses incurred to manage insurance company subsidiaries. The Superior Court held that all expenses were properly allocated to management fee income, and the FTB did not appeal.
Square D Company v. Franchise Tax Board
CGC 05-442465 (2007)
CA Superior Court
Income Apportionment - Inclusion of gross vs. net receipts from treasury operations
Significance: First application of Microsoft/GM decisions; quantification of distortion necessary for alternative apportionment
Sterling Drug v. Franchise Tax Board CA Superior Court
Income Combined reporting - Worldwide combined reporting sought by affiliates
Expedia, Inc. v. City and County of Denver
Town of Breckenridge v. Colorado Travel Company
CO State District Courts
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
J. Crew v. Connecticut CT Superior Court
Sales Capital improvements
Texaco v. Connecticut CT Superior Court
Income P.L. 86-272 - Applicability to a corporate partner registered to do business in the state where the partnership operates.
District of Columbia v. Expedia, Inc. DC Superior Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
D.C. Office of Tax and Revenue v. Sunbelt Beverage, LLC
64 A.3d 138 (2013)
DC Court of Appeals
Franchise Whether the statute of limitations to issue an assessment was triggered by filing the wrong return
Significance: Absent bad faith, the statute of limitations is triggered when a company mistakenly files the wrong return
Alenia N. Am., Inc. v. D.C. Office of Tax and Revenue
Case No. 2012-OTR-00015 (2013).
D.C. Office of Administrative Hearings
Franchise Flow-up of pass-through entity factors
4
State Tax Cases
Case Court Tax Type Principal Issue Siemens Corp. v. D.C. Office of Tax and
Revenue Hess Corp. v. D.C. Office of Tax and
Revenue Shell Oil Co. v. D.C. Office of Tax and
Revenue ExxonMobil Oil Corp. v. D.C. Office of
Tax and Revenue
D.C. Office of Administrative Hearings
Franchise Transfer pricing
City of Jacksonville v. Hotels.com, L.P. Leon County v. Hotels.com, L.P. Miami-Dade County v. Internetwork
Publishing Corp. Orbitz, LLC v. Miami-Dade County County of Monroe v. Priceline.com, Inc.. Orbitz, LLC v. Broward County Orbitz, LLC v. Osceola County Brevard County v. Priceline.com, Inc.. Volusia County v. Expedia, Inc. Orange County v. Expedia, Inc. Gannon v. Hotels.com, L.P. (Palm
Beach)
FL Federal Court of Appeals District Courts Circuit Courts
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
City of Atlanta v. Hotels.com, L.P. City of Columbus v. Orbitz, Inc. City of Rome et al. v. Hotels.com, L.P.
GA District Court Supreme Court Court of Appeals Superior Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Orbitz, LLC v. Hawaii Department of Taxation
HI Tax Appeal Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
American Express v. Idaho
920 P.2d 921 (1996)
ID Supreme Court
Use Whether mailing promotional material into state was a taxable use
5
State Tax Cases
Case Court Tax Type Principal Issue A.B. Dick v. Illinois DOR
678 N.E. 2d 1100 (1997)
IL Appellate Court
Income Unitary - Whether affiliates were engaged in a unitary business
Significance: Defined IL unitary standard
Aggregate Equipment v. Illinois DOR
UT 00-3
IL Admin. Hearing
Use Estoppel - Taxpayer’s right to rely on written advice presented by auditor
Significance: Assessment voided under Taxpayers’ Bill of Rights
American River Transportation v. Bower
351 Ill. App. 3d 208 (2004)
IL Appellate Court
Use State’s ability to assess fuel purchased outside state and consumed on navigable waters in state
Significance: Application of Use Tax held to violate Commerce Clause
Amtrak v. State of Illinois, et al
N.D. Ill. 2010
IL Northern District
Gas Use Tax Secure dismissal of claim for refund of gas use tax from public utility responsible for collecting and remitting the tax
AT&T Teleholdings, Inc. v. Illinois DOR
No. 2007 L 50909 (Pending)
IL Circuit Court
Income Relationship of federal consolidated return regulations to Illinois combined returns
BP Oil Pipeline & Unocal Pipeline Company v. Illinois DOR
Nos. 2001-2364 and 2001-2365, appeal denied, 212 Ill. 2d 528 (2004)
IL Appellate Court
Income Unitary - Whether corporate partner was unitary with pipeline partnerships; penalty relief
BP Oil Supply Co. v. Illinois DOR
IT-2000-12
IL Admin. Hearing
Income Unitary - Computation of net operating losses when member leaves a unitary business group
Caterpillar Tractor v. Lenckos
84 Ill. 2d 102 (1981)
IL Supreme Court
Income Unitary - Whether Illinois law employed unitary method of apportionment
Significance: First case addressing unitary apportionment in Illinois Cilcorp v. Illinois DOR 07-TX-113 07-IT-0189
IL Circuit Court
Income Unitary; Business Income
Significance: Extremely favorable settlement on eve of trial
City Suburban Electric Motors v. Illinois DOR
278 Ill. App. 3d 564, 663 N.E.2d 77 (1997)
IL Appellate Court
Service Validity of regulation limiting application of machinery exemption
Significance: Regulation held invalid
6
State Tax Cases
Case Court Tax Type Principal Issue Communications & Cable of Chicago v.
City of Chicago DOR
275 Ill. App. 3d 680 (1995)
IL City of Chicago Appellate Court
Transaction Applicability to cable company converter boxes and remote controls due to Illinois constitutional prohibition on home rule occupation taxes not authorized by statute
Donaldson, Lufkin & Jenrette Securities Corporation v. Illinois DOR
Unpublished decision
IL Circuit Court
Income Business Income; Apportionment; Gross Receipts; Supremacy Clause
Dover Resources v. Illinois DOR 04 CH 20459 Dover Fluid Management v. Illinois DOR 08 L 51313
IL Circuit Court
Income Unitary; Business Income; 80/20
Significance: Global settlement of 10 years involving 2 court cases and multiple audits
Dover Corporation v. Illinois DOR
98 L 50170 (2000)
IL Circuit Court
Income Unitary; Business Income; 80/20 Company
First Data v. Illinois DOR
97 L 51084
IL Circuit Court
Service Occupation
Applicability to microfiche services
Geary v. Dominick’s
129 Ill. 2d 389, 544 N.E.2d 344 (1989)
IL Supreme Court
Use Class action regarding taxation of medical devices
Gore v. Indiana Ins. Co.
2007 WL 2493435 (1st Dist. 2007)
IL Appellate Court
Premium Tax Secure dismissal, with prejudice, of proposed class action litigation seeking a refund of premium tax.
Gulfstream v. Illinois DOR
Unpublished decision (2002)
IL Appellate Court
Use Applicability to aircraft refurbisher who never took title to aircraft
Hercules Inc. v. Illinois DOR
324 Ill. App. 3d 329 (2001), appeal denied, 197 Ill. 2d 560 (2001)
IL Appellate Court
Income Business Income - Operational nature of gain from sale of affiliate
Significance: Taxpayer victory in leading “operational test” case
Illinois v. Amway Corporation 11 L 9019 (Pending
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
7
State Tax Cases
Case Court Tax Type Principal Issue Illinois v. Anthropologie.com and
FreePeople.com 11 L 9544 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Audiovox Corporation 11 L 9549 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Books-A-Million, Inc., et al
07 L 12274 (Pending)
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Burlington Coat Factory
860 N.E.2d 423 (1st Dist. 2006)
IL Appellate Court
Use Tax/Internet Nexus
Secure dismissal of company named in state false claims act litigation accused of fraudulently failing to collect and remit use tax on Internet sales
Illinois v. Casual Male 11 L 12910 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Creative Labs 11 L 12933 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Delivery Agent
12 L 99 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Electrolux Home Care Products
11 L 10079 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. 4sure.com, Inc.
04 L 002072 (Pending)
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Fox Broadcasting Company
03 L 011683
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Guess?, Inc. and Guess.com, Inc.
02 L 1442
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
8
State Tax Cases
Case Court Tax Type Principal Issue Illinois v. Hallmark Cards, Inc.
07 L 12270
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Hammacher Schlemmer 11 L 10081 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Hobby Lobby Companies, Inc., et al
03 L 014703
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. J. Crew 11 L 8288 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Jo-Ann Stores, Inc. and Ideaforest.com, Inc.
Unpublished decision
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Kohler
12 L 1484 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Major League Soccer
03 L 011652
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. New Balance
Unpublished decision
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. NB Web Express 11 L 10328 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Nike, Cole Haan and Converse, Inc.
11 L 9022 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Omaha Steaks International
Unpublished decision
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
9
State Tax Cases
Case Court Tax Type Principal Issue Illinois v. Panasonic Corporation of
North America 11 L 8765 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. QVC & LMC Right Start 11 L 8533 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Ritz Camera Centers
834 N.E.2d 912 (2005); 878 N.E.2d 1152 (2007) (Pending)
IL Circuit Court Appellate Court Supreme Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Significance: Illinois Appellate Court limits whistleblower statute applicability to use tax issues
Illinois v. Samsonite
11 L 12920 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois v. Stuart Weitzman, Inc.
07 L 12284
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. The New York Times Company
03 L 15387
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Tupperware.com, Inc.
07 L 12279
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Urban Outfitters, Inc., et al
Unpublished decision
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Viking Office Products
Unpublished decision
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Vitamin World
Unpublished decision
IL Circuit Court
Use Qui tam/Nexus - Illinois whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales.
Illinois v. Whirlpool 11 L 12909 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
10
State Tax Cases
Case Court Tax Type Principal Issue Illinois v. World Kitchen 11 L 9546 (Pending)
IL Circuit Court
Sales/Use False Claims Act case alleging fraudulent failure to collect and remit tax on shipping and handling charges
Illinois State Chamber of Commerce v. John Filan
216 Ill. 2d 653 (2005)
(Pending on remand)
IL Supreme Court
User Fees Constitutionality of raising general revenue from user fees
In re Orbitz Taxes and Fees Litigation (Cook County)
City of Fairview Heights v. Orbitz, Inc. City of Chicago v. Hotels.com, L.P.
IL District Court Circuit Courts
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
John Hancock Life Ins. Co. v. Department of Financial & Prof. Reg.
05 CH 50458
IL Circuit Court
Retaliatory Tax Could Illinois impose its retaliatory tax on a foreign insurer who provided insurance to state employees.
McDonald’s Corp. v. Illinois DOR
94 L 510015
IL Circuit Court
Hotel Occupancy Applicability to private conference facility
Miami Corporation v. Illinois DOR
212 Ill. App. 3d 702 (1991)
IL Appellate Court
Income Alternative Apportionment
Significance: Rare instance of taxpayer victory in alternative apportionment
Milwaukee Safeguard Ins. Co. v. Selcke
179 Ill.2d 94 (1997)
IL Supreme Court
Premium Tax Represented group of insurance companies raising constitutional challenge to Illinois premium tax
Mobil Oil v. Johnson
93 Ill. 2d 126, 442 N.E.2d 846 (1982)
IL Supreme Court
Use Applicability to refinery fuels
R.R. Donnelley & Sons v. Illinois DOR
00 L 050459
IL Circuit Court
Sales Exemption - Applicability of regulation limiting sales tax exemption to graphic arts process
Significance: Regulation held invalid Roche Holdings v. Illinois DOR 10 L 51542 (Pending)
IL Circuit Court
Income Business Income; Unitary
11
State Tax Cases
Case Court Tax Type Principal Issue Roche Holdings v. Illinois DOR 06 L 50326
IL Circuit Court
Income Business Income
Significance: Complete concession by State prior to trial
Shell Oil v. Johnson
117 Ill. App. 3d 1049, 453 N.E.2d 125 (1983)
IL Appellate Court
Use Applicability of pollution control exemption to oil refinery
SpaceCom Systems v. Illinois DOR
Unpublished decision
IL Circuit Court
Telecommuni-cations
Constitutionality of tax; Sale for Resale; Definition of Retailer
Square D Co. v. Illinois DOR
233 Ill. App. 3d 1070, 599 N.E.2d 1235 (1992)
IL Appellate Court
Use Applicability to aircraft moving in interstate commerce
Sun Life Assurance Co. of Canada v. DOR
IL Supreme Court
Retaliatory Tax Challenged imposition of retaliatory tax on alien insurance company
TV Guide v. Illinois DOR
00 L 50616 (2002)
IL Circuit Court
Income Apportionment for satellite property
Technology Company
IT 04-7 (2003)
IL Admin. Hearing
Income Unitary - Whether affiliates were engaged in a unitary business
Significance: Redefined IL unitary definition to exclude same line of business requirement
Tektronix v. Illinois DOR
04 CH 20458 (2005)
IL Circuit Court
Income Business Income - Cessation of business
The Goodyear Tire & Rubber Company v. Illinois DOR
00 L 50060
IL Circuit Court
Income Unitary; Business Income - Treatment of pension reversion as business/nonbusiness income and unitary group issues
Therakinetics v. Illinois DOR
Unpublished decision
IL Appellate Court
Use Applicability of exemption to medical appliance
Significance: Regulation held invalid
Toronto Dominion Bank v. Illinois DOR
IT 00-5
IL Admin. Hearing
Income Unitary - Whether affiliates were engaged in a unitary business
12
State Tax Cases
Case Court Tax Type Principal Issue Town Crier v. Illinois DOR
733 N.E.2d 780 (2000)
IL Appellate Court
Use Applicability to taxpayer with no in-state solicitation
Travenol Laboratories v. Johnson
195 Ill. App. 3d 532, 553 N.E.2d 14 (1990)
IL Appellate Court
Use Validity of state regulation limiting exemption for medical appliances
Significance: Regulation held invalid
Tyson Foods v. Illinois DOR
312 Ill. App. 3d 64 (1st Dist. 2000), appeal denied, 188 Ill. 2d 584 (2000)
IL Appellate Court
Income P.L. 86-272
Veritude Holdings Corporation, et al v. Illinois DOR
10 L 51721 (Pending)
IL Circuit Court
Income Apportionment - cost of performance
Waste Management v. Illinois DOR
98 L 050263
IL Circuit Court
Use Scope of pollution control exemption as applied to turbine powered by landfill methane
MBNA v. Indiana
Dkt. No. 49T10-0506-TA-53 (Pending)
IN Appellate Tax Board
Income Nexus - Non-physically present credit card issuer
Orbitz, LLC v. Indiana Department of Revenue
Lake County Convention and Visitors Bureau v. Sabre Holdings Corp.
Marshall County v. Hotels.com, L.P.
IN District Court Tax Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Louisville/Jefferson County Metro Government v. Hotels.com, L.P.
City of Bowling Green v. Hotels.com, L.P.
KY Federal Court of Appeals District Court Court of Appeals Circuit Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
13
State Tax Cases
Case Court Tax Type Principal Issue Avon Products, Inc. Application of US Public Law 86-272, dealing with taxable nexus.
The court held that the Company was taxable in Maine because the technical definition of solicitation was exceeded but it said that the Avon representatives were independent contractors and not employees.
Mayor and City Council of Baltimore v. Priceline.com, Inc..
County Commissioners of Worcester County v. Priceline.com, Inc..
Montgomery County v. Priceline.com, Inc.
Baltimore County v. Priceline.com, Inc..
MD District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
NCR Corp. v. Comptroller of the Treasury
313 Md. 118, 544 A.2d 764 (1988)
MD Court of Appeals
Income Foreign-Source Income; Apportionment
Significance: Issues of significance for multinational companies
MBNA v. Massachusetts
Dkt. No. 265986 (Pending)
MA Appellate Tax Board
Income Nexus - Non-physically present credit card issuer
Kent County v. Hotels.com, L.P. County of Genesee v. Hotels.com, L.P.
MI Circuit Courts
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
MBNA America v. Minnesota
Dkt No. A04-1826 (2005)
MN Supreme Court
Income Statute of limitations nonapplicability due to Taxpayer Bill of Rights
Significance: Rare victory at state Supreme Court under Taxpayer Bill of Rights for taxpayer that missed a S/L deadline
NCR Corp. v. Commissioner of Revenue
438 N.W.2d 86 (1989)
MN Supreme Court
Income Whether the taxpayer properly excluded from gross income royalties paid by licensees and dividends and interest received from foreign subsidiaries
City of Branson v. Hotels.com, L.P. St. Louis County v. Prestige Travel, Inc. City of Jefferson v. Hotels.com, L.P.
MO Circuit Courts
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
14
State Tax Cases
Case Court Tax Type Principal Issue State of Mississippi v. Priceline.com,
Inc. MS Chancery Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Montana Department of Revenue v. Priceline.com, Inc.
MT State District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Northwest Farm Credit Services v. Montana DOR
Dkt. No. DA 07-0581
MT Supreme Court
Income Statute of Limitations - Whether the taxpayer’s failure to report a federal refund claim prior to finalization keeps the statute of limitations open for unrelated issues
Pitt County v. Hotels.com, L.P. Wake County v. Hotels.com, L.P. Cumberland County v. Hotels.com, L.P. Dare County v. Hotels.com, L.P. Buncombe County v. Hotels.com, L.P. Mecklenburg County v. Hotels.com, L.P. Orbitz, LLC v. Hoyle
NC Federal Court of Appeals District Court Superior Courts Business Court
Hotel Occupancy
Sales Tax
Applicability to internet travel companies; validity of legislation targeting online travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Atlantic City Showboat, Inc. v. Director, Division of Taxation
(Pending)
NJ Superior Court, Appellate Division
Sales/Use Taxability of electricity distribution services.
DeVry Educational Development Corp v. Director, Division of Taxation
(Pending)
NJ Tax Court
Income Constitutionality of “throwout” rule.
Gillette v. New Jersey
Dkt. No. 002480 (2001)
NJ Tax Court
Income P.L. 86-272 - Whether in-state activities of employees were limited to those activities protected by the statute
Helme Tobacco v. New Jersey NJ Tax Court
Income Deductibility of interest paid to affiliate
Norfolk Southern v. New Jersey
2005 WL 1531329 (2005)
NJ Tax Court
Income Apportionment
Significance: Important nationwide issue with implications for many industries
15
State Tax Cases
Case Court Tax Type Principal Issue Pfizer Inc. v. Director, Division of
Taxation
NJ Tax Ct. Dkt. 000055-2006 (Pending)
NJ Tax Court
Income Constitutionality of “throwout” rule, which increases a taxpayer’s apportionment percentage based on whether the taxpayer is subject to net income tax in other states
Significance: Important nationwide issue with throwback implications
San Mar v. Director, Division of Taxation (Pending)
NJ Tax Court
Income Constitutionality of “throwout” rule.
International Business Machines Corp. v. Director, Division of Taxation
26 N.J. Tax. 102 (2011)
NJ Tax Court
Income Tax It held that New Jersey could not tax foreign income that was not subject to U.S. tax.
Labor Ready Northeast, Inc. v. Director, Division of Taxation
25 N.J. Tax. 607 (2011)
NJ Tax Court
Sales Tax It held that Labor Ready could sue for a declaratory judgment in court even though it had not been audited by the NJ Division of Taxation.
Sodexho v. Director, Division of Taxation
23 N.J. Tax 167 (2004)
NJ Superior Court Appellate Division
Sales/Use Purchases as agent for tax exempt entity.
Township of Lyndhurst v. Priceline.com, Inc.
NJ Federal Court of Appeals District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
City of Gallup v. Hotels.com, L.P.
NM District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Allied-Signal v. NYS
645 N.Y.S.2d 895, 229 A.D.2d 759 (1996)
Allied-Signal v. NYC
580 N.Y.S.2d 696 (1991)
NY Supreme Court Appellate Division Court of Appeals
Income Transactional Nexus; Apportionment - Inclusion in tax base of gain from sale of nonunitary affiliate
Significance: Pre- and post- U.S. Supreme Court decisions under same facts, but NY courts refused to follow Supreme Court’s approach
American Airlines
Dkt. No. 819514 (2005)
NYS Tax Appeals Tribunal
Sales Purchases of electricity for use in exempt aircraft maintenance
16
State Tax Cases
Case Court Tax Type Principal Issue American Airlines
Dkt. No. 3353 (2010)
NY Supreme Court Appellate Division
New York City Hotel Room Occupancy Tax
Whether the permanent resident exception to the New York City Hotel Room Occupancy Tax applies to all rooms rented by a person while that person qualifies as a permanent resident or to only those rooms rented for 90 consecutive days.
American Zurich Insurance
Dkt. Nos. 822840, 822841, 822842, 822843, 822849, 822906 (2010)
NYS Division of Tax Appeals
Franchise Whether deductible reimbursements constitute “premiums.”
Barclays Bank
Dkt. No. 818789 (2005)
NYS Tax Appeals Tribunal
Banking Taxpayer seeking netting of assets and liabilities for tax on gross assets
British Airways
Dkt. Nos. 818259 & 818429 (2004)
NYS Tax Appeals Tribunal
Sales Sales tax on purchases of chilled and heated water at airport
Brooklyn Union Gas Co.
Dkt Nos. 822692 & 822693 (2012)
NYS Tax Appeals Tribunal
Income Whether utility companies were entitled to the investment tax credit as a result of their construction and use of certain property in the state.
Colt Industries v. NYC
484 N.Y.S.2d 551, 106 A.D.2d 59 (1985)
NY Supreme Court Appellate Division
Income Deductibility of management fees
Disney Enterprises
Dkt. No. 818378 (Pending)
NYS Tax Appeals Tribunal
Income Apportionment - Inclusion of nontaxpayer’s numerators in combined apportionment formula
Dominion Textile
Dkt. No. 812248 (1997)
NYS Tax Appeals Tribunal
Income Business Income - Characterization of income from stock options under prior regulations as business income, not investment income.
Expedia, Inc. v. City of New York County of Nassau v. Hotels.com, L.P.
NY Federal Court of Appeals District Court Supreme Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Fairchild Industries
Dkt. No. 815543 (2000)
NYS Tax Appeals Tribunal
Income Taxability of extraterritorial income
17
State Tax Cases
Case Court Tax Type Principal Issue General Electric Capital v. NYS
810 N.E.2d 864 (2004)
NY Court of Appeals
Sales Bad debts
Grace Co.
Dkt. No. TSB-D-90(9)C (1980)
NYS Tax Appeals Tribunal
Income Penalty - Reasonable cause grounds for abatement of penalty
Significance: Established precedent regarding abatement of late filing penalties
Richard Gray v. NYS
651 N.Y.S.2d 740, 235
A.D.2d 641 (1997)
NY Supreme Court Appellate Division
Personal Income Residency
Grumman
Dkt. No. 813147 (1996)
NYS Division of Tax Appeals
Income Allocation of expenses to tax-exempt income
Significance: First case rejecting taxing authority’s discretion to disallow expenses
GTE Spacenet v. NYS
638 N.Y.S.2d 29, 224 A.D.2d 283 (1996)
NY Supreme Court Appellate Division
Utilities Nature of income received by corporate partner from utility partnership
Significance: Taxpayer victory; groundbreaking decision with numerous implications
GTE Spacenet v. NYS
607 N.Y.S.2d 677, 201 A.D.2d 429 (1994)
NY Supreme Court Appellate Division
Excise Applicability of telecommunication excise tax to wireless provider
Heidleberg-Eastern
Dkt. Nos. 806890 & 807829 (1994)
NYS Tax Appeals Tribunal
Income Combination
Significance: Taxpayer victory and leading precedent for taxpayer-sought combination
Huckaby v. NYS
829 N.E. 2d 276 (2005)
NY Court of Appeals
Personal Income Challenged New York’s “convenience of the employer” rule for nonresidents
Insurance Company
(Pending)
New York City Tax Appeals Tribunal
Income Whether HMOs are insurance companies and thus, exempt from the New York City general corporate tax.
Insurance Company
(Pending)
NYS Division of Tax Appeals
Income Whether certain taxes are eligible for the retaliatory tax credit under the NYS franchise tax imposed on insurance companies.
Lazard Freres v. NYC
Dkt. No. TAT (E) 93-107 (UB) (1996)
NYC Tax Appeals Tribunal
Unincorporated Business
Availability for exemption for taxes paid by partner
Significance: Taxpayer victory that led to change in statute
18
State Tax Cases
Case Court Tax Type Principal Issue Kellwood Company v. Tax Appeals
Tribunal
Dkt No. 513812 (Pending)
NY Supreme Court Appellate Division
Income Combination - Forced combination of manufacturer/marketer of apparel and consumer goods with its factoring company
Significance: First NY case concerning the validity of a factoring subsidiary
Municipal Bond Investors
Dkt. No. 811060 (1994)
NYS Tax Appeals Tribunal
Insurance Retaliatory Tax
Significance: Represented a consortium of insurance companies and successfully argued that a company did not have to litigate a tax issue in another state to get a credit against its NY retaliatory tax for taxes paid to the other state
Nielsen
Dkt. No. 818817 (2004)
NYS Tax Appeals Tribunal
Personal Income Whether a nonresident’s gain on the sale of restricted stock was taxable for NYS personal income tax purposes
New York Funeral Chapels
Dkt. No. 818854 (2003)
NYS Division of Tax Appeals
Income Calculation of net operating loss carryovers for income tax purposes
New York State Association of Enrolled Agents v. New York State Dep’t of Taxation & Finance
905 N.Y.2d 856 (2010)
NYS Supreme Court NY County
Non-tax case Constitutionality of annual tax return preparer fee and registration requirement as applied to enrolled agents.
Significance: Case helped prompt the legislative override of the tax return preparer statute as applied to enrolled agents.
New York Times
Dkt. No. 809776 (1995)
NYS Tax Appeals Tribunal
Income Combination
Significance: Taxpayer victory; important precedent for significance of federal section 482 regulations
Matter of Panavision, Inc.
Dkt. No. 816660 (6/6/02)
NY Tax Appeals Tribunal
Franchise Tax Where a group of taxpayers has filed returns on a combined basis, can the Department of Taxation decombine one “open year” member of the group and require it to file a separate return even though the statute of limitations for the group has expired?
Prudential Ins. Co. v. Wrynn
Index No. 102267/11 (2012)
NY Supreme Court Appellate Division (1st Dept)
Insurance Whether payment of NYS corporate franchise tax entitles taxpayer to a credit against its retaliatory tax liability.
RJ Reynolds Tobacco v. NYC
643 N.Y.S.2d 865, 169 Misc. 2d 674 (1996)
NY Supreme Court NY County
NYC Corporation Tax
Interstate commerce discrimination in depreciation schemes
Significance: Taxpayer victory and oft-cited precedent regarding interstate discrimination
19
State Tax Cases
Case Court Tax Type Principal Issue Real Estate Development Partnership
(Pending)
NYS Division of Tax Appeals
Personal Income Whether taxable income should have been allocated to various partners from the sale of certificates authorized by Section 421-a of the New York State Real Property Tax Law by a partnership.
Real Estate Services Firm
(Pending)
NYS Division of Tax Appeals
Sales/Use Sales tax on building management services.
Rozier
Dkt. No. 819958 (2006)
NYS Tax Appeals Tribunal
Personal Income Whether a nonresident individual’s income from patents sold to a related corporation was nontaxable investment income
San Mar
Dkt. No. 822993 (2011)
NYS Division of Tax Appeals
Sales/Use Proof of nontaxable sales for resale.
Smith Kline
Dkt. No. 818583 (2004)
NYS Division of Tax Appeals
Use Sample drug packaging
Sodexho
Dkt. Nos. 820020; 820021; 820022; 820023; 820024 (2008)
NYS Tax Appeals Tribunal
Sales/Use Purchases as agent for tax exempt entity
Tamagni v. NYS
91 N.Y.2d 530; cert. denied, 525 U.S. 931 (1998)
NY Court of Appeals
Personal Income Residency and constitutionality of statutory residence test
Telecheck Services
Dkt. No. 822275 (2009)
NYS Division of Tax Appeals
Sales/Use Whether check verification services constitute taxable information services.
Significance: Taxpayer victory; affirmed the continuing validity of the principal purpose/primary function test.
Upjohn & Pharmacia
Dkt. No. 818583 (2004)
NYS Tax Appeals Tribunal
Use Sample drug packaging
Wascana Energy
Dkt. No. 817866 (2002)
NYS Tax Appeals Tribunal
Income Nexus - Whether a Canadian corporation shipping natural gas through public pipelines had taxable nexus in NY
Significance: Important taxpayer victory; no nexus for shipper where title passed at border
20
State Tax Cases
Case Court Tax Type Principal Issue Yampol
Dkt. No. 813261 (1997)
NYS Tax Appeals Tribunal
Personal Income Statute of limitations regarding notice of federal change
City of Columbus v. Hotels.com, L.P. City of Findlay v. Hotels.com, L.P. Hamilton County v. Hotels.com, L.P.
OH Federal Court of Appeals District Courts
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
State of Oklahoma v. Priceline.com, Inc.. OK State District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Cox Cablevision Corp. v. DOR
12 Or Tax Court 219 (1992)
OR Tax Court
Income Unitary - Whether cable television station engaged in unitary business with over-the-air broadcasting stations
Crocker Equipment Leasing v. DOR
314 Or. 122, 838 P.2d 552 (1992) 12 OTR 16 (1991)
OR Supreme Court
Income Apportionment - Whether bank unitary group is entitled to modification of the statutory apportionment formula
Maytag Corp. v. DOR
12 OTR 502 (1993)
OR Tax Court
Income Unitary
Canteen v. PA
818 A.2d 594 (2003), affirmed by Penn. Supreme Court
PA Commonwealth Court
Income Business Income - Nonbusiness nature of section 338(h)(10) gain
Significance: First case ever decided on this nationwide issue and important taxpayer victory
Toronto Dominion Investments, Inc. v. Commonwealth, Pennsylvania Commonwealth Court Dkt. Nos. 651 F.R. 2012, 652 F.R. 2012, 653 F.R. 2012, 654 F.R. 2012, 655 F.R. 2012, 656 F.R. 2012, 657 F.R. 2012, 658 F.R. 2012, 659 F.R. 2012, and 660 F.R. 2012
PA Commonwealth Court
Corporate Next Income Tax and Foreign Franchise Tax
Whether the taxpayer properly apportioned its income and capital stock from its interests in investment partnerships to Pennsylvania pursuant to a separate accounting method.
21
State Tax Cases
Case Court Tax Type Principal Issue City of Philadelphia v. Hotels.com. County of Lawrence v. Hotels.com, L.P.
PA District Court Court of Common Pleas
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
City of Charleston v. Hotels.com, L.P. Town of Mount Pleasant v. Hotels.com,
L.P. City of Myrtle Beach v. Hotels.com, L.P. City of North Myrtle Beach v.
Hotels.com, L.P. Horry County v. Hotels.com, L.P. Town of Hilton Head Island v.
Hotels.com, L.P.
SC District Courts Courts of Common Pleas
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
NCR Corp. v. South Carolina Tax Comm’n
304 S.C. 1, 402 S.E.2d 666 (1991)
SC Supreme Court
Income Foreign-Source Income; Apportionment
City of Goodlettsville v. Priceline.com, Inc.
TN District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
State of Tennessee v. Target Corp.
02-3764-III (2003)
TN Chancery Court
Use Qui tam/Nexus - Tennessee whistleblower action filed by relator alleging failure to collect/report sales/use tax on internet sales
Significance: Decision resulted in dismissal of all whistleblower cases alleging use tax violations in TN
Janssen Biotech Inc. (f/k/a Centocor, Inc.) v. Roberts, Tennessee Chancery Court Nos. 11-1043-II
& 12-450-II
TN Chancery Court Corporate Excise Tax
Whether the taxpayer was exempt from Tennessee corporate excise tax pursuant to Public Law 86-272.
Bayer Healthcare Pharmaceuticals, Inc. v. Roberts
Tennessee Chancery Court No. 11-494-I
TN Chancery Court Corporate Excise Tax
Whether the taxpayer was exempt from Tennessee corporate excise tax pursuant to Public Law 86-272.
22
State Tax Cases
Case Court Tax Type Principal Issue City of San Antonio v. Hotels.com, L.P. City of Orange v. Hotels.com, L.P. City of Houston v. Hotels.com, L.P.
TX District Courts Appellate Court State District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
Upjohn v. TX
38 S.W.3d 600 (2000)
TX Court of Appeals
Franchise Whether taxable capital exception to receipts factor applied to earned surplus tax
City of Bellingham v. Hotels.com, L.P. WA District Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
FIA Card Services f/k/a MBNA
220 W.Va. 163, 640 S.E.2d 226 (2006)
WV Supreme Court of Appeals
Franchise and Income
Nexus - Non-physically present credit card issuer
City of Madison v. Expedia, Inc. WI Circuit Court
Hotel Occupancy Applicability to internet travel companies
Significance: Coordination of multistate defense against actions pending nationwide
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