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While Virginia Supreme Court Holds “Subject-To-Tax” Means “Actually Taxed,” Determination of “Actually Taxed” is Relatively Broad for Purposes of Addback Exception

On August 31, 2017, in a 4-3 split decision, the Virginia Supreme Court (Court) affirmed a circuit court’s ruling that in order for income to qualify for the “subject-to-tax” exception to its addback statute, the income must actually be taxed by another state. Kohl’s Dep’t Stores, Inc. v. Va. Dep’t of Taxation, no. 160681 (Va. … Continue Reading

Focus on Tax Controversy – December 2015

McDermott Will & Emery has released the December 2015 issue of Focus on Tax Controversy, which provides insight into the complex issues surrounding U.S. federal, international, and state and local tax controversies, including Internal Revenue Service audits and appeals, competent authority matters and trial and appellate litigation. Mark Yopp authored an article entitled “Waiting for … Continue Reading

Recent Legislation in Virginia Retroactively Amending the Addback Statute Exacerbates a Potentially Unfair Law

Separate return state addback statutes, such as the Virginia addback statute, can overreach to produce an unfair and potentially unconstitutional overstatement of income assigned to the state.  Recently Virginia amended its addback statute retroactively 10 years to taxable years beginning on or after January 1, 2004.  The legislation is intended to codify an administrative interpretation … Continue Reading

Retroactive Revenue Raisers: A Taxpayer Win in New York; Problems Ahead in Virginia

When state legislatures are in need of additional funds – as they often are – it is tempting to enact retroactive legislation to bring more dollars into state coffers. Two recent developments have Due Process Clause questions of retroactivity back in the news in the SALT world. In Caprio v. N.Y. State Dep’t of Taxation … Continue Reading
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