Tag Archives: David M. Kall

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Ohio Senate passes bill to create tax credit for Opportunity Zone investments

We have been following a new federal program that provides federal tax benefits for qualifying investments in geographically designated Opportunity Zones. As part of federal tax reform in 2017, Congress created the Opportunity Zone program to encourage investment in low-income areas. Last October the IRS and Treasury Department issued proposed regulations to provide investors with further guidance on the program. Now, the Ohio General Assembly is seriously considering a tax credit against the Ohio income tax with similar policy objectives in mind.

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Amazon abandons HQ2 in New York

After facing unexpected resistance, Amazon made a shocking announcement that it would abandon its plans for a second headquarters in Long Island City. Politicians, lawmakers, union leaders, and members of the surrounding community starkly opposed Amazon’s HQ2, citing a number of concerns including the nearly $3 billion in tax incentives that had been promised to Amazon.

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Illinois: Attorney general moves to dismiss tax case initiated by whistleblower on state’s behalf

Illinois Attorney General Lisa Madigan recently moved to dismiss a tax case brought by a tax whistleblower and, in doing so, suggested that in-state actors soliciting orders in Illinois may not have triggered “substantial nexus” to tax. We have been following developments as one notorious lawyer who has been dubbed the “king of qui tam,” Stephen Diamond, filed suit under the Illinois False Claims Act (IFCA) to prosecute non-compliance with the State’s use tax.

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Ohio: High court rules that “on-site management” model avoids sales tax on employment services

The Ohio sales tax on employment services is continuing to generate controversy. Originally imposed on Jan. 1, 1993, the sales tax on employment services is an important component of the state of Ohio budget that annually raises approximately $160 million in tax revenue. But the tax is controversial because it can be a heavy burden on businesses attempting to fill their labor needs, particularly in the tight labor market that we are currently experiencing.

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The Supreme Court of Utah gave taxpayers a sweet victory recently in Utah State Tax Commission v. See’s Candies.

The Supreme Court of Utah gave taxpayers a sweet victory recently in Utah State Tax Commission v. See’s Candies.  In See’s Candies, the Utah State Tax Commission challenged an arrangement between two wholly owned subsidiaries of Berkshire Hathaway that provided Utah corporate franchise tax benefits. The Utah Supreme Court, however, ultimately ruled in favor of the taxpayer, See’s Candies.

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Cincinnati Reds score Ohio tax break

The Ohio Supreme Court recently issued a divided ruling in Cincinnati Reds, LLC v. Testa allowing a use tax break for the Cincinnati Reds baseball team for bobblehead dolls and other promotional items given to some attendees at their home games. Though the Court split 5-2 in the ruling, the majority opinion that Justice Patrick Fischer authored quoted longtime Reds radio announcer Marty Brennaman to hold that “[T]his one belongs to the Reds.”

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Ohio Supreme Court offers guidance on “agency exclusion” under Ohio commercial activity tax.

One controversial issue that commonly arises in Ohio commercial activity tax (CAT) audits is whether taxpayers qualify for the so-called “agency exclusion” for gross receipts received on behalf of others. The CAT is Ohio’s entity-level tax for the privilege of doing business in the state, as measured by the taxpayer’s “taxable gross receipts” in Ohio. Some other states impose a net income tax at the entity-level, which removes expenses from the base of the tax, or have no entity-level business tax at all.

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Wayfair update: States begin imposing economic nexus rules as Congress mulls federal legislation

Effective Oct. 1, 2018, economic nexus rules take effect for remote sellers in 11 states, including Alabama, Illinois, Indiana, Kentucky, Michigan, Minnesota, New Jersey, North Dakota, Washington, and Wisconsin. That means that remote sellers must begin collecting sales tax in these states if they meet the state’s economic nexus threshold, whether they have a physical presence in the state or not.

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More states respond to South Dakota v. Wayfair

The legal environment of business is continuing to change following the U.S. Supreme Court’s landmark decision in South Dakota v. WayfairAs we have reported, the case fundamentally alters sales and use tax obligations for many online and remote merchants. States are now free to require online and remote sellers to collect sales tax from their customers based solely upon in-state economic activity, even if they do not have a physical presence in the taxing state.

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Minnesota: High court strikes down tax on trust income from the sale of shares in Minnesota corporation

The Supreme Court of Minnesota recently struck down the State Tax Commissioner’s attempt to impose an income tax on trust income from the sale of shares in a Minnesota corporation.  The Court issued its opinion in Fielding v. Commissioner of Revenue on July 18, 2018, finding that the tax violates constitutional due Process protections against extraterritorial taxation.

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