Daily Tax Report: State

Marijuana Tax Advocates Move Ahead in Florida, Pennsylvania

Uber, Lyft Being Probed in New Jersey on Misclassifying Drivers

Latest Stories

How Are States Taxing the Income Called GILTI? (Podcast)

In this episode of Talking Tax Siri Bulusu talks with Bruce Fort, counsel to the Multistate Tax Commission about GILTI and what the state-level implications are for multinational businesses.

Advocates of Taxing Marijuana Push Ahead in Florida, Pennsylvania (1)

Proposals to legalize recreational marijuana are gaining speed in two of the nation’s most populated states, and there’s potentially hundreds of millions in tax revenue on the line.

Chicago Teachers Strike Shows Shift for Schools Once Near Ruin

The Chicago teachers striking for higher wages and smaller class sizes are one sign of the financial improvement for a city school system once seen on the verge of collapse. The district was helped by a higher share of the city’s property tax and an influx of state aid under a previous administration.

EPA Seeks IRS Help to Push Investors to Contaminated Sites

The EPA wants investors to take advantage of a tax benefit program focused on distressed communities, but says it first needs help from the IRS.

France Publishes Digital Services Tax Draft Guidance (1)

The French government published draft guidance for its digital services tax, just a week before companies have to make their first payment.

Uber, Lyft Being Probed in New Jersey on Misclassifying Drivers

New Jersey labor auditors are investigating Uber Technologies Inc. and Lyft Inc. to see if the rideshare companies are wrongly classifying drivers as independent contractors and should be on the hook for employment taxes, according to documents obtained by Bloomberg Law.

IRS Opens PTIN Season as Supreme Court Passes on Fees Case

The Internal Revenue Service has that preparer tax identification number applications and renewals are now being processed. That’s good news for tax professionals who are gearing up for next season—but there could be some changes on the horizon.

Tax Developments

Alaska AG Releases Opinion on Initiative Bill Relating to Oil, Gas Production Tax, Payments, Credits

The Alaska Attorney General (AG) Oct. 14 released an opinion on an initiative bill relating to oil and gas production excise tax, tax payments, and tax credits. The Governor’s Office asked the AG to review the application for the initiative bill. The initiative bill seeks to change the oil production tax by imposing a 10-15 percent tax on the gross value at the point of oil production dependent on the price per-barrel, imposing an additional production tax, and eliminating the applicability of certain tax credits and incentives against these taxes. The AG opined that: 1) the four statutory initiative bill requirements were met; 2) the form of the initiative application was satisfied; 3) the proposed ballot and petition summaries complied with statutory requirements; and 4) new tax code terms such as “field” and “units” may cause implementation issues and raise constitutional concerns of equal protection and due process. The AG concluded by recommending certification of the initiative bill application. [Alaska Att’y Gen., Opinion No. 2019200671, 10/14/19]

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Arizona Court of Appeals Finds Tax Sale Purchaser Not Entitled to Excess Proceeds

The Arizona Court of Appeals Oct. 15 affirmed the superior court’s property tax decision. After a property owner was deficient in her assessment obligations, the Vista Santa Fe Homeowners Association filed an action to foreclose on its assessment lien. The superior court authorized the property’s sheriff’s sale, where Taxpayer purchased the property. The property was also subject to two deed of trusts. The first deed’s holder commenced a trustee’s sale, and the property was sold to a third party. A bank, the second deed’s holder, was permitted to intervene as of right in the still pending foreclosure action. The bank requested the excess proceeds from the sheriff’s sale in partial satisfaction of its lien. Taxpayer then moved to intervene, also seeking the excess proceeds from the sheriff’s sale. The superior court denied Taxpayer’s motion. Taxpayer argued that it was entitled to the proceeds because it obtained equitable title to the property. The appeals court determined that Taxpayer couldn’t be included among the potential creditors having claims to the proceeds because it had no legal interest in the property at the time of the sheriff’s sale. Accordingly, the appeals court affirmed the superior court’s decision. [Vista Santa Fe Homeowners Ass’n v. Millan, Ariz. Ct. App., No. 1 CA-CV 18-0609, 10/15/19]

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California Appeals Office Affirms FTB’s Assessment of Income Tax on Medical Doctor’s Air Force Grant

The California Office of Tax (OTA) Appeals Feb. 20 affirmed the action of the Franchise Tax Board (FTB), which found Taxpayer liable for additional individual income tax. Taxpayer received a grant from the U.S. Air Force Reserve Pay Office. Taxpayer asserted that she was entitled to exclude the grant from her gross income because she was a medical doctor pursuing a specialized training program for board certification, which should be viewed as the equivalent of pursuing a degree. The OTA found that Taxpayer failed to establish: 1) she received a qualified scholarship; and 2) she was a candidate for a degree at an educational organization. Accordingly, the OTA the FTB’s action. [Cal. Office Tax App., Case No. 18010816, 02/20/19]

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California Appeals Office Denies Taxpayer’s Petition for Rehearing Appeal of Innocent Spouse Relief Denial

The California Office of Tax Appeals (OTA) Aug. 12 denied Taxpayer’s petition for rehearing of its appeal from the Franchise Tax Board’s (FTB) assessment of individual income tax. Taxpayer asserted that: 1) he wasn’t liable for the tax because the statute of limitations for collection expired; and 2) a rehearing was warranted to correct a variety of allegedly erroneous factual findings. The OTA found that Taxpayer misconstrued the nature of the FTB’s concession that the statute of limitations expired. The issue was whether Taxpayer qualified for innocent spouse relief and the expiration of the statute of limitations for collection had no bearing on that issue. Taxpayer conceded that he earned income and failed to prove the correct allocation of the tax liabilities among the various sources of income. Taxpayer’s repetition of the same arguments he previously made was insufficient to warrant a new hearing. Therefore, the OTA denied the petition. [Cal. Office Tax App., Case No. 18011278, 08/12/19]

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