A Grain of SALT: March State Focus – New York

On January 19, a New York qui tam complaint was unsealed.  This was unremarkable in and of itself, as there are many qui tam complaints progressing through the courts.  However, what was remarkable was the nature of the suit.  The suit, State of New York ex. rel. Doreen Light v. Myron Melamed, et al., involves a relator alleging that a decedent and his family structured the decedent’s estate to avoid New York personal income and estate taxes.  This is apparently the first estate tax qui tam suit that has been unsealed.  The attorney general declined to intervene in the case.  As per usual, the attorney general declined to comment as to why it did not intervene.

Although an unsealed case where the attorney general declined to intervene is not otherwise remarkable, the case is notable.  It shows that potential relators and their attorneys are looking to expand the tax provisions of the False Claims Act as much as they can.  Even though this case will likely not have an impact on corporate taxpayers, those taxpayers should know that relator’s attorneys are actively looking for cases to bring, and are being creative.  There are no signs, either in the governor’s current proposed budget or otherwise, that the delegation of tax enforcement authority to private citizens is being reconsidered or even restrained.  Taxpayers should be wary.

Top February Hits You May Have Missed

 Connecticut Will Make You Disclose Personal Customer Data!

You’re Invited: COST, Bloomberg Tax and McDermott Will & Emery to Host Post-Oral Argument Roundtable Discussion

Connecticut Responds to the Federal Repatriation Tax

Looking Forward to March

March 6, 2018: Diann Smith will facilitate the “Retail and Hospitality Industry Session” at the Unclaimed Property Professionals Organization Annual Conference in Tampa, FL.

March 7, 2018: Diann Smith will present, and Steve Kranz will serve as the judge, at the interactive and entertaining “Mock Trial”, which will provide a deeper look at an audit that resulted in litigation, at the Unclaimed Property Professionals Organization Annual Conference in Tampa, FL.

March 9, 2018: Alysse McLoughlin will present “State Impacts of Federal Tax Reform” at the Federal Bar Association’s 2018 Tax Law Conference in Washington DC.

March 13, 2018: Alysse McLoughlin and Peter Faber will present “Sales Tax and Miscellaneous Taxes” at Practising Law Institute’s Nuts and Bolts of State and Local Tax 2018 in New York, NY.

March 13, 2018: Peter Faber will presenting “State and Local Taxation of International Business and Mergers & Acquisitions” at Practising Law Institute’s Advanced State and Local Tax 2018 in New York, NY.

March 15, 2018: Catherine Battin, Mary Kay Martire, Alysse McLoughlin and Diann Smith will present a special CLE/CPE on the State and Local Implications of Tax Reform at Tax in the City® in McDermott’s Chicago office.

March 20, 2018: Alysse McLoughlin is presenting “The Kitchen Sink: Unconventional Arguments in Defense of Assertions of Income Tax” at the ABA/IPT Advanced Tax Seminars in New Orleans, LA.

March 23-24, 2018:  Stephen Kranz is presenting “State Implications of Federal Tax Reform” at the National Conference of State Legislatures SALT Task Force meeting in Washington DC.  Congress may have finished its tax overhaul last year, but for state governments, the scramble has just begun.

In our holiday tradition, as a thank you to all of our Inside SALT readers and subscribers, we are pleased to present our annual Inside SALT Crossword Puzzle Contest. We hope you’ll enjoy this little diversion that tests your knowledge of key state and local tax developments this year. To enter, please download and print the puzzle by clicking on the image below. After you complete the puzzle, please send it as a PDF file to skranz@mwe.com no later than January 5, 2018, at 11:59 pm EST. The first eligible entrant to submit a complete and correct puzzle wins a $200 Amazon gift card. The contest is open to registered Inside SALT email subscribers from the United States and District of Columbia who are age of majority or older. (To become a subscriber, please enter your email address in the box on the right side of your screen.) Contest ends at 11:59 pm EST on January 5, 2018. Participation is subject to the Official Rules. For complete details, click here to view the Official Rules. This contest is void outside the US and DC and where prohibited, restricted or taxed. Please also share your feedback about what topics you would like to hear more about in the comments section below. We look forward to hearing from you and to bringing you timely SALT updates and analysis in the coming year!   Click puzzle to enlarge and download.

Wrapping Up November – and Looking Forward to December

You can view all of the topics we discussed over the last month here. Our lawyers appear at the following State and Local Tax events in December:

December 4–5, 2017: Peter Faber, Arthur Rosen and Diann Smith spoke at the 36th Annual NYU Institute on State and Local Taxation.

December 14, 2017: Catherine Battin, Mary Kay Martire and Jane May are presenting about the SALT aspects of Tax Reform at the Tax in the City® – Year in Review, which will focus on tax reform.

As details of tax reform take shape, our team continues to evaluate proposed legislation and to provide critical, real-time guidance on the likely impacts to our clients.

McDermott has always partnered with our clients to design strategies that are both creative and sound—to effectively plan for long-term business success. Access our new Tax Reform Resource Center for strategies and tools that will continue to help you lead your organization through the opportunities and risks brought about by proposed tax reform. You can also subscribe to stay on top of McDermott’s latest take on tax.

Access the Tax Reform Resource Center.

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!

Wrapping up July—and Looking Forward to August

SALT Activities for August:

August 2, 2017: Diann Smith is moderating a panel at the 50th Multistate Tax Commission Annual Conference in Louisville, Kentucky about “The Significance of the MTC – Past, Present, and Future – from the Outside.”

August 5, 2017: Stephen Kranz is presenting about Unclaimed Property at the National Conference of State Legislatures (NCSL) SALT Task Force Meeting in Boston, Massachusetts, and will cover the following topics:

  • Lessons learned from the first legislative season in which the Revised Uniform Unclaimed Property Act was considered, and in some cases adopted in part.
  • The MoneyGram case, currently before the United States Supreme Court under its original jurisdiction to handle cases brought by one state against another, which may rewrite the rules regarding which state has priority over custody of unclaimed funds.

Wrapping up July:

Our July 2017 blog posts are available on insidesalt.com, or may be read below by clicking on the titles. 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.

July 6, 2017: Connecticut Will Make You Disclose Personal Customer Data!

July 7, 2017: Tax Changes Implemented As Part of Revenue Package Supporting Illinois Budget

July 7, 2017: Illinois Unclaimed Property Law Substantially Revised As Part of Revenue Package Supporting Illinois Budget

July 12, 2017: Beverage Tax Wars Continue as Parties Head Back to Court for a Preliminary Injunction Hearing on the Cook County, Illinois Tax

July 13, 2017: What Is Minimal Substantial Nexus?

July 24, 2017: House Judiciary Subcommittee to Consider Sensenbrenner Bill Tomorrow

In our holiday tradition, as a thank you to all of our Inside SALT readers and subscribers, we are pleased to present our annual Inside SALT Crossword Puzzle Contest. We hope you’ll enjoy this little diversion that tests your knowledge of key state and local tax developments this year. To enter, please download and print the puzzle by clicking on the image below. After you complete the puzzle, please send it as a PDF file to skranz@mwe.com no later than December 31, 2016, at 11:59 pm EST. The first eligible entrant to submit a complete and correct puzzle wins a $200 Amazon gift card. The contest is open to registered Inside SALT email subscribers from the United States and District of Columbia who are age of majority or older. (To become a subscriber, please enter your email address in the box on the right side of your screen.) Contest ends at 11:59 pm EST on December 31, 2016. Participation is subject to the Official Rules. For complete details, click here to view the Official Rules.) This contest is void outside the US and DC and where prohibited, restricted or taxed. Please also share your feedback about what topics you would like to hear more about in the comments section below. We look forward to hearing from you and to bringing you timely SALT updates and analysis in the coming year! Click puzzle to enlarge and download.

As the on-demand economy continues to boom, the delivery of everything! now! continues to be the mantra.  In particular, delivery of meals and prepared food is the latest business model to see tremendous growth. Delivery of alcohol is coming not far behind. As restaurants and fast food chains shift from providing their own delivery (or perhaps no delivery at all) to delivering via one of the new service models, they must consider the impact that this decision will have on their sales tax collection obligation. This is especially true in light of the recent increase in predatory lawsuits targeting the overcollection and undercollection of sales tax on delivery charges.

McDermott Will & Emery state and local tax lawyers Steve Kranz, Diann Smith, Cate Battin and Mark Yopp recently published a whitepaper in State Tax Notes on this emerging topic that describes the typical service models that exist and offers a framework for restaurants and other prepared food providers to begin thinking about the often complex sales tax consequences.  Steve Kranz also presented the key issues identified in this whitepaper at the National Conference of State Legislatures Executive Committee Task Force on State and Local Taxation meeting in Salt Lake City, Utah on January 8, 2016. Given policymaker interest in the topic, it is not unlikely that legislators will seek to rationalize the burdens that current sales tax rules place on the blossoming on-demand business models.

Yesterday, McDermott Will & Emery partner Steve Kranz was a featured guest on WAMU 88.5’s The Kojo Nnamdi Show, one of NPR’s most prestigious talk radio shows in the greater Washington, DC area. Kranz participated in this week’s Tech Tuesday segment titled “Taxing Your Online Shopping Spree” which focused on the current state of internet sales tax impositions in the United States and various proposals to tax e-commerce that are currently being considered by Congress and state legislatures. Kranz was joined by fellow guests Steve DelBianco, Executive Director at NetChoice, and Bill Fox, Director of the Center for Business and Economic Research at the University of Tennessee.

A permanent link to this informative discussion is available here.

In our holiday tradition, as a thank you to all of our Inside SALT readers and subscribers, we are pleased to present our annual Inside SALT Crossword Puzzle Contest. We hope you’ll enjoy this little diversion that tests your knowledge of key state and local tax developments this year. To enter, please download and print the puzzle by clicking on the image below. After you complete the puzzle, please send it as a PDF file to skranz@mwe.com no later than December 31, 2015, at 11:59 pm EST. The first eligible entrant to submit a complete and correct puzzle wins a $200 Amazon gift card. The contest is open to registered Inside SALT email subscribers from the United States and District of Columbia who are age of majority or older. (To become a subscriber, please enter your email address in the box on the right side of your screen.) Contest ends at 11:59 pm EST on December 31, 2015. Participation is subject to the Official Rules. For complete details, click here to view the Official Rules.) This contest is void outside the U.S. and D.C. and where prohibited, restricted or taxed. Please also share your feedback about what topics you would like to hear more about in the comments section below. We look forward to hearing from you and to bringing you timely SALT updates and analysis in the coming year! Click puzzle to enlarge and download.