SALT Blog 

To ring in the New Year, the Texas Comptroller announced needed guidance to remote sellers and marketplace facilitators regarding sales and use tax obligations for businesses that do not have a physical presence in Texas but sell or facilitate sales to Texas customers. 

In 2018, the US Supreme Court decided the case, South Dakota v. Wayfair, in which the Court altered the decades-long standard that prevented states from imposing sales tax obligations on businesses unless they had a physical presence in the state.  In Wayfair, the Court replaced the physical nexus standard with an ...

In an opinion released September 9, 2022, the Online Merchants Guild (“Guild”) secured a victory against the Pennsylvania Department of Revenue (“Department”) in its attempt to collect information and back taxes on an estimated 11,000 out-of-state sellers who stored inventory in Amazon’s warehouses in Pennsylvania. See Online Merchants Guild v. Hassell, Pa. Commw. Ct. No. 179 MD 2021, 9/9/2022.

During 2012, Amazon and the Pennsylvania Department of Revenue (“Department”) entered into an agreement whereby Amazon agreed to voluntarily collect and remit ...

On August 3, 2022, the Pennsylvania Commonwealth Court upheld a panel decision finding that a senior living facility failed to qualify as a “purely public charity” and therefore was not entitled to exemption from sales tax. See Friends Boarding Home of W. Quarterly Meeting v. Commonwealth, No. 332 F.R. 2018 (Pa. Commw. Ct. Aug. 3, 2022) (op. not reported).  In order to satisfy the requirements for a “purely public charity,” an institution must satisfy the five-part HUP test, which requires that an institution:

• Advance a charitable purpose;
• Donate or renders gratuitously a ...

Pennsylvania and Philadelphia have implemented important changes to their taxes, affecting both businesses and individuals.  Below are the highlights of those recent changes.   

Pennsylvania Tax Changes

Pennsylvania’s 2022-2023 Budget Bill (H.B. 1342), adopted July 8, 2022, implements significant corporate net income tax (CNIT) and personal income tax (PIT) changes for taxpayers.  While many taxpayers within Pennsylvania will be happy to hear of these changes, those outside of Pennsylvania may not be so jubilant.

CNIT Rate Reduction

Under the new law, the corporate net income ...

The SALT deduction cap, enacted by a Republican-controlled Congress in 2017, is a quagmire for Democrats.  They’ve made promises to repeal it, and have made a wedge issue out of it.  But repealing the cap would be regressive (it would benefit higher-income earners), which contradicts the party’s broader platform. 

Aside from repeal, leaders in the kill-the-cap campaign have sought to undo the SALT deduction cap by challenging its constitutionality in court and by enacting State statutes that seek to end-run the cap (known as “workaround statutes”).  But challenges to the ...

Since 2017 when the Tax Cuts & Jobs Act was enacted and placed a hard cap on state and local tax deductions, critics of the cap have campaigned to reverse it.  These critics (as well as the cap’s proponents) hail from every walk of life and political stripe.  But the mantel against the cap has been taken on most prominently by the Democratic Party and a handful of high-tax States that in recent election cycles have tended to vote Democrats into office, often labeled “Blue States.”  The efforts to overturn the cap have been three-fold: (1) state workaround statutes that seek to end-run the ...

Judicial review of agency action is a critical part of the fair administration of tax laws. Effective September 2021, two new procedures are available for taxpayers to seek judicial review of actions by the Texas Comptroller to either deny a refund claim or impose an assessment based on alleged tax deficiencies.

First, the Texas legislature created a refund claim superhighway for taxpayers. This was part of Senate Bill 903. Prior to the law change, taxpayers were required to exhaust certain administrative remedies including having their claim heard by the State Office of ...

With the start of the new fiscal year comes another change: a reversion to standard nexus policies for Pennsylvania and Philadelphia.  During the pandemic, both Pennsylvania and Philadelphia implemented temporary nexus policies.  Pennsylvania implemented temporary nexus waivers for purposes of its Corporate Net Income Tax (“CNIT”), while Philadelphia implemented similar waivers for purposes of its Business Income and Receipts Tax (“BIRT”).  Those temporary waivers for both Philadelphia and Pennsylvania expired on June 30, 2021.  While nothing has changed with ...

The U.S. Supreme Court has declined to hear the case of New Hampshire v. Massachusetts, but this is not the last we will hear of the underlying issue.  During October 2020, Massachusetts adopted an emergency regulation addressing remote workers’ tax obligations.  The emergency regulation adopted a “status quo” approach, whereby Massachusetts treated employees who had been working in Massachusetts before the pandemic, but were now working remotely, as if they were still working in Massachusetts.  The tax implication of that policy was that nonresidents working entirely out ...

It has been a year since a large portion of the workforce was required to work from home almost overnight.  A majority of employers learned that they could function well remotely and many employees enjoyed the flexibility of remote work, including the ability to work from states different than their traditional work location. Since there seems to be light at the end of the tunnel, many employers are considering whether or not they will maintain a permanent remote workforce.  Such a decision should not be made without consideration of the state and local tax ramifications of a remote ...