SALT Blog - SALT Blawg

by Stewart Weintraub and Jennifer Weidler

On June 15, 2011, the California Legislature followed an increasing number of states in passing an "Amazon" bill.  The California Bill, like many of its predecessors, is attempting to expand its authority to require out-of-state online retailers, such as Amazon, to collect sales tax on online purchases made by in-state residents and still comply with the constitutional requirement that the online retailer has a "physical presence" in the state.  According to the Bill, and similar bills, a physical presence includes the physical ...

by Stewart Weintraub and Jennifer Weidler

On June 1, the Performance Marketing Association ("PMA"), a trade association founded to connect, inform and advocate on behalf of performance marketing, filed suit against the Illinois Department of Revenue challenging the validity of the State's recently enacted Amazon law.  The law at issue, House Bill 3659 ("Bill"), requires certain out-of-state retailers to collect sales tax if they maintain affiliates within the state who advertise, via Websites, on the out-of-state company's behalf.  The complaint alleges that the Bill ...

This is the year of the Amazon. Multiple sources, including individual affiliates, are reporting that Amazon, Overstock and other Internet retailers are severing ties with their affiliates in Connecticut and Arkansas. Both of those states recently enacted changes to their sales tax laws that required Internet retailers to collect sales tax on transactions made with persons in those states. The states were able to “reach” the Internet retailers through an expanded nexus by means of the “associate” or “affiliate” programs commonly used by such vendors.

Meanwhile ...

Alabama House Bill 434, signed by Governor Robert Bentley, enacts three significant changes to Alabama’s apportionment provisions for tax years beginning on or after December 31, 2010:

* Double weight the sales factor for determining apportionment to 50%;

* Change from focusing on the location of income production for apportionment purposes to the taxpayer’s market for the sale for transactions other than tangible personal property; and

* Adoption of a “throwout” rule (similar to that recently rejected by New Jersey), by which a transaction that cannot be assigned to a ...

by Stewart Weintraub and Jennifer Weidler

On June 3^rd, a Federal judge approved a $1 billion class action settlement against AT&T.  The settlement relates to AT&T's collection of state and local taxes applied to its mobile device data plans, which the class action plaintiffs claimed were improperly collected pursuant to the Internet Tax Freedom Act ("IFTA") of 1998.  IFTA prohibits the imposition of state and local taxes upon Internet access through November 1, 2014.  Class action lawsuits were filed in all 50 states against AT&T alleging a violation of IFTA.  The cases were later ...

 By Paul Masters

Any Material Damage Enough to Avoid Sales Tax on Installation Costs for a Roller Coaster, But Likely Not in Texas

The New York Tax Appeals Tribunal has summarily affirmed a recent decision of the Division of Tax Appeals analyzing the applicability of sales and use tax to the $2,000,000 purchase and installation costs paid by Amusements of WNY, Inc. (“WNY”) for the Silver Comet roller coaster. The Tax Appeals Tribunal rejected the Division of Taxation’s appeal on the basis that the Silver Comet could be unbolted from its cement footings and re-erected elsewhere ...

by Stewart Weintraub and Jennifer Weidler

While it is increasingly becoming a common theme amongst state legislatures to target out-of-state online retailers with so called "Amazon" laws, the approach behind those attacks has taken many forms.  Amazon laws generally state that an online-retailer must collect sales tax for sales in the state if the company is using an in-state affiliate to market and sell.  The online retailer scenario has the in-state affiliates typically place the out-of-state retailer's ads or banners upon their websites and receive a commission or some ...

by Stewart Weintraub and Jennifer Weidler

New Jersey's Governor, Chris Christie, recently signed legislation enacting important changes for New Jersey's tax scheme relating to businesses.  The first bill, S2753, provides for a three year phase-in of a single-sales-factor apportionment formula. New Jerseycurrently has a three-factor apportionment formula, consisting of sales, property and payroll factors.  Beginning on January 1, 2012, the sales factor will be weighted as 70% of apportionment, while property and payroll factors will be weighted as 15% each.  During ...

by Stewart Weintraub and Jennifer Weidler

The U.S. Supreme Court's decision in Meadwestvaco Corp. v. Illinois Dept. of Revenue calls into question a recent Virginia Ruling relating to allocation apportionment. Virginia Public Document Ruling No. 11-52, 04/05/2011.  Pursuant to established case law, a state may tax an apportioned share of the value generated by a multistate enterprise's activities that form part of a "unitary business."  In Allied-Signal, Inc. v. Director, the U.S. Supreme Court enunciated the factors to be considered in establishing the existence of a ...

Some two weeks ago, we commented on the passage of House Bill No. 2403, a stand-alone version of the Amazon law that would have clearly required Amazon and other Internet retailers subject to collecting Texas sales and use tax on sales of tangible personal property if there was a link to a physical presence in Texas. Amazon had such a link via its distribution center near Dallas. A bill introduced by Rep. Harper-Brown to protect Amazon from such a requirement to collectTexas sales and use tax was buried in the House Ways & Means Committee.

On May 31, 2011, Texas Governor Rick Perry vetoed this ...