Tag Archives: State Supreme Court

ILN Today Post

South Dakota: State Supreme Court sides with sellers in the battle for online tax revenue

n eagerly awaited opinion that the South Dakota Supreme Court filed last week says that the state’s hands must remain tied when it comes to taxing the sales of internet retailers.

It was just two weeks ago that we addressed the positions each side presented to the state Supreme Court during oral arguments. To recap, the plaintiffs, internet sellers Wayfair, Overstock.Com, and Newegg, were fighting the state law, SB 106, that required remote sellers with no physical location in South Dakota to remit sales tax, and follow all procedures of the law, if they meet one of two criteria in the previous calendar year or the current calendar year:

  1. The remote seller’s gross revenue of sale of tangible property, any products transferred electronically, or services delivered into South Dakota, exceeds $100,000.
  2. The remote seller has 200 or more separate transactions tangible property, any products transferred electronically, or services delivered into South Dakota.

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ILN Today Post

South Dakota: State Supreme Court hears oral arguments in nexus lawsuit

In the ongoing legal saga between internet retailers Wayfair, Overstock.Com, and Newegg, and South Dakota, the Supreme Court of South Dakota heard oral arguments last week on the familiar question of how much leeway states have to impose sales and use taxes on out of state internet retailers who arguably have no physical presence in the taxing jurisdiction.

South Dakota asserts that the main issue presented is whether precedent prevents “South Dakota from imposing an otherwise valid sales tax collection on retailers who lack a ‘physical presence’ within the state.” In addition, the State also presented a second issue on the court, “whether the United States Supreme Court should reconsider its decision in [the 1992 case] Quill Corp. v. North Dakota…” Quill prohibits states from imposing sales and use tax obligations on remote retailers in the absence of a physical presence in the taxing state, pursuant to the dormant commerce clause.

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ILN Today Post

Ohio: State Supreme Court allows non-resident’s tax credit of nearly $200,000

In the case Giddens v. Testa, the Ohio Supreme Court reversed a Board of Tax Appeals (Board) decision that disallowed a non-resident tax credit related to a distribution from a corporation that did some of its business in Ohio, for the tax year 2008. The tax commissioner’s theory was that the distribution constituted business income, and was therefore apportionable in part to Ohio, based on the proportion of the corporation’s business in that state. The Board affirmed the assessment, the taxpayers appealed, and the high court reversed the Board, concluding that the taxpayers properly treated the income at issue as nonbusiness income allocable solely to their state of domicile, Missouri.

BACKGROUND

The Court provided the following facts as background. The plaintiffs/appellants, Ernest and Louann Giddens, lived in Missouri, but paid Ohio income tax by virtue of their ownership of shares in a corporation that does business in Ohio. For the tax year at issue, 2008, that company was an S corporation. The S corporation, Redneck, Inc. is a wholesale supplier of equipment for trailer parks, including running gear, axles, springs, hitches, and jacks, had just two shareholders, the Giddens.
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