October 2017

McDermott extended its popular Tax in the City® program to Seattle, with a meeting on October 12 at the Amazon headquarters. McDermott established Tax in the City® in 2014 as a discussion and networking group for women in tax aimed to foster collaboration and mentorship, and to facilitate in-person connections and roundtable events around the country. The Seattle program was one of the best attended Tax in the City® events to date, featuring a CLE/CPE presentation about Privilege and the Ethics of Social Media by Cate Battin, Kristen Hazel and Jane May, followed by a roundtable discussion in which Elizabeth Chao and Sandra McGill discussed international issues related to income from digital products. Britt Haxton and Kristen Hazel discussed planning considerations related to federal tax reform, and Diann Smith provided the state and local tax considerations related to both issues. Continue Reading Inaugural Seattle Tax in the City® | Highlights and Takeaways

On October 1, 2017, the Delaware Department of Finance published final regulations in the Register of Regulations repealing its former unclaimed property regulations and promulgating a new reporting and examination manual.  See 21 DE Reg 336 (Oct. 1, 2017).  The final reporting and examination regulation contains no substantive changes from the revised version that was re-proposed on August 1, 2017.  As published, the regulations are set to be adopted and take effect on October 11, 2017. Continue Reading Get Ready for the Countdown: Final Delaware Unclaimed Property Regulations Published

Wrapping Up September – and Looking Forward to October

Upcoming McDermott Will & Emery SALT Activities in October:

October 9, 2017Stephen Kranz is presenting about “State Corporate Tax Reform Trends” at the National Taxpayers Conference Annual Meeting, Washington DC.

October 12, 2017: Cate Battin, Kristen Hazel, Britt Haxton, Jane May, Sandra McGill, Diann Smith and Elizabeth Chao are hosting and presenting at the inaugural Tax in the City® event in Seattle, Washington. They will cover topics such as attorney-client privilege and the ethics of social media (CLE/CPE), recent developments around US Tax Reform, and updates on state and local tax issues for Seattle and the surrounding areas.

October 20, 2017: Peter Faber will present on “State and Local Tax Aspects of Acquisitions” at PLI’s Conference on the Taxation of Mergers & Acquisitions in New York.

October 24, 2017: Arthur Rosen will be a panelist in “The Great ‘Debate’: Views on Significant State Tax Issues and A Salute to Paul Frankel” at COST’s 48th Annual Meeting in Orlando, Florida.

October 25, 2017: Alysse McLoughlin will present about “Financial Services Hot Topics” at COST’s 48th Annual Meeting in Orlando, Florida.

October 27, 2017: Arthur Rosen will be moderating numerous panels at the National Association of State Bar Tax Sections 38th Annual Meeting in Washington, DC: “State and Local Tax Issues before Congress” and “International Tax Proposals – What They Are All About.”

October 28, 2017: Alysse McLoughlin will be speaking at the National Association of State Bar Tax Sections 38th Annual Meeting in Washington, DC about “Apportionment & Market Based Sourcing – Where Are We Now?” Additionally, Peter Faber will speak at this same conference about the “Top 10 Tax Issues,” with Arthur Rosen moderating that presentation.

Wrapping up September:

Our September 2017 blog posts are available on insidesalt.com, or read each article by clicking on the titles below. To receive the latest on state and local tax news and commentary directly in your inbox as they are posted, click here to subscribe to our email list.

September 6, 2017: While Virginia Supreme Court Holds “Subject-To-Tax” Means “Actually Taxed,” Determination of “Actually Taxed” is Relatively Broad for Purposes of Addback Exception

September 14, 2017: Illinois DOR Proposes Use Tax Nexus Standards for Trade Show Retailers

September 15, 2017: South Dakota Supreme Court Rules in Favor of Remote Retailers; Next Step US Supreme Court?

September 28, 2017: Republican Leaders Release Tax Reform Framework

September 29, 2017: State and Local Tax Aspects of Republican Tax Reform Framework

September 29, 2017: Holders Beware: Delaware Department of State Notices to be Mailed in Two Weeks!

On October 2, 2017, the State of South Dakota (State) filed its petition for a writ of certiorari with the United States Supreme Court (Court). A copy of the cert petition is available here and the case, South Dakota v. Wayfair, Inc. et al., is expected to be docketed on October 3, 2017. The State is asking the Court to overturn its physical presence standard used to determine whether an entity has substantial nexus under the dormant Commerce Clause. This comes only a few weeks after the South Dakota Supreme Court ruled against the State in favor of the online retailer defendants, citing the Court’s physical presence standard upheld in Quill on stare decisis grounds.

Practice Note

This development comes as no surprise to the state and local tax community, and begins what is likely to be one of the most closely watched cert petitions in years. Going forward, the online retailers have three options: (1) acquiesce that the Court should grant cert; (2) waive their right to file a response to the cert petition; or (3) file a brief in opposition. If the online retailers choose the third option, they will have 30 days from today (if the case is in fact docketed today) to file their brief in opposition. This deadline is subject to extensions, upon request (the first of which is always granted as a matter of right). We expect a number of groups to file amicus curiae briefs regarding this cert petition given the significance of the issue raised. If the online retailers do file a brief in opposition, the State will be given an opportunity to file a reply brief, rebutting the points made by the online retailers and reiterating the arguments made in the State’s cert petition. Unlike the cert petition and the brief in opposition, which must be filed with the Court under strict deadlines, the exact timing of the reply brief varies. As a general rule of thumb, a reply brief is usually filed approximately 10 days after filing of the brief in opposition.

While this dispute is a long way from being heard by the Court on the merits (if at all), the cert petition is a critical first step that will have implications to Congress, the courts, state legislatures, taxpayers, and revenue departments across the country. Stay tuned for more coverage of this cert petition and the developments that follow.