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Arthur R. Rosen focuses his practice on tax planning and litigation relating to state and local tax matters for corporations, partnerships and individuals. Formerly the deputy counsel of the New York State Department of Taxation and Finance, as well as counsel to the governor's Temporary Sales Tax Commission and tax counsel to the New York State Senate Tax Committee, Arthur has also held executive tax management positions at Xerox Corporation and AT&T. He has worked in accounting and law firms in New York City. Read Arthur Rosen's full bio.

Can a seller have nexus with a state – so as to be obligated to collect and remit that state’s sales and use taxes – only in connection with certain sales that seller makes into that state?  In this article, the authors explore the concept that only certain transactions may be subject to that obligation, depending on the extent of the seller’s connection with that state.

Read the full article.

Originally published in State Tax Notes, July 3, 2017.

The Massachusetts Department of Revenue (Department) has just issued Directive 17-2 revoking Directive 17-1 which adopted an economic nexus standard for sales tax purposes. Directive 17-2 states that the revocation is in anticipation of the Department proposing a regulation that would presumably adopt the standards of Directive 17-1. It appears that the Department took seriously, perhaps among other concerns, internet sellers’ arguments that Directive 17-1 was an improperly promulgated rule. Internet sellers that recently received letters from the Department regarding Directive 17-1 (see our previous blog post) may need to reconsider their approach.

Recently, the Massachusetts Department of Revenue (Department) sent letters to several companies regarding Directive 17-1. The Directive announces a “rule” requiring remote internet sellers to register for and begin collecting Massachusetts sales and use tax (sales tax) by July 1, 2017, if they had more than $500,000 in Massachusetts sales during the preceding year. The legal premise behind the rule is that the Department believes sellers with more than $500,000 in annual Massachusetts sales must have more than a de minimis physical presence so that requiring sales tax collection would not be prohibited by Quill Corp v. North Dakota, 504 US 298 (1992). The Directive’s examples of such physical presence include the presence of cookies on purchasers’ computers, use of third-party carriers to make white-glove deliveries and the use of online marketplaces to sell products. The Directive also states that sellers who fail to collect tax beginning July 1, 2017 will be subject to interest and penalties (plus, of course, any uncollected taxes).

We think the Directive is contrary to law on three main grounds. First, we believe that the items that the Department asserts create physical presence are insufficient to establish more than a de minimis physical presence. For example, the presence of cookies on computers in a state appears to be less of a physical presence than the floppy disks the seller in Quill sent into North Dakota (which were used by its customers to place orders) that the United States Supreme Court viewed as de minimis. Second, the Directive violates the state administrative procedures act because it constitutes an administrative rule that was not validly adopted. Third, the Directive’s rule violates the Internet Tax Freedom Act, a federal statute, because the rule discriminates against internet sellers.

By its own terms, the Directive applies only prospectively. The Directive does not assert a blanket rule that internet sellers are liable for sales tax for periods prior to July 1, 2017, if they met a certain sales threshold. The risks from non-collection for such periods are dependent on a company’s specific facts. The letters advise sellers that they may be eligible for voluntary disclosure for such prior periods.

Companies have two general options: (1) register and begin collecting or (2) not register or collect. Litigation has been brought on behalf of a number of sellers to challenge the Directive on the grounds identified above. One important aspect of that litigation is the request for an injunction barring the enforcement of the Directive pending a court decision; an injunction would likely prompt many sellers to take a “wait and see” approach. Ultimately, sellers must make a business decision based on their own facts and business circumstances.

On May 31, 2016, the Washington Department of Revenue (DOR) Appeals Division released a Determination (No. 15-0251, 35 WTD 230) denying a German pharmaceutical company’s business and occupation tax (B&O) protest. The administrative law judge (ALJ) ruled that while the nondiscrimination provisions contained in Article 24 of the US-Germany Income tax Treaty (Treaty) “may apply,” the B&O does not discriminate against non-US businesses because it is imposed on any business deriving royalty income from Washington sources and applies equally to foreign and US companies. The ALJ also found that the company could avoid double taxation of the royalty income by excluding income taxed by Washington from its German tax base. While the company also challenged the constitutionality of the 2010 B&O economic nexus law, the ALJ declined to entertain it—citing a lack of authority to rule on the constitutionality of Washington statutes.

Continue Reading Washington ALJ Upholds B&O Assessment on German Company’s Royalty Income

In the first Vermont Supreme Court decision addressing combined unitary reporting since Vermont’s combined reporting regime became effective in 2006, the court affirmed a lower court’s decision that AIG, the multinational insurance company, was not unitary with a ski resort operated by a subsidiary in Vermont; accordingly, a combined report covering the two businesses was not required. The decision is important because it lays the foundation for future unitary cases in Vermont.

The court agreed with AIG that there were no economies of scale between the operations of AIG and the ski resort. “Because [the entity] is a ski resort and therefore its business type is not similar to AIG’s insurance and financial service business, there is no opportunity for common centralized distribution or sales, and no economy of scale realized by their operations.” On centralization of management, the court noted that although AIG controlled the appointments to the ski resort’s board and management, this did not translate into “actual control” over the ski resort’s operations. Lastly, the Vermont Department of Taxes attempted to argue functional integration based primarily on AIG’s influx of working capital to the ski resort. The court rejected this assertion stating the funding “served an investment rather than operational function. The financing was not part of an AIG operational goal to grow part of its business. Further, there is no operational integration between AIG’s insurance and financial businesses and the ski resort operated by [the resort].”

The case is interesting because it involved whether an instate entity was unitary with its parent. For the year at issue, Vermont had a three factor apportionment formula with a double-weighted sales factor. Presumably, the ski resort had a high Vermont apportionment factor and relatively little income, so including AIG in the combined group increased AIG’s Vermont apportionment factor without significantly  diluting its income.

Interestingly, the court addressed AIG’s burden of proof on the unitary issue. The taxpayer argued that a preponderance of the evidence standard should apply. The Vermont Supreme Court disagreed. Looking to the United States Supreme Court’s decision in Container Corp. as well as to decisions of other states, the taxpayer has the burden of proving by “clear and cogent” evidence that its operations are not unitary.  Interestingly, the court suggested that one California court decision that applied a preponderance of the evidence standard to a unitary question was distinguishable because that case involved a taxpayer claiming that unity existed — and AIG was claiming that unity did not exist. This disparate burden depending on the direction of the unitary argument may prove important to taxpayers seeking to bring entities or operations into a combined report in Vermont.

State tax professionals may react to this decision in a manner similar to the way many reacted when the Court of Appeals of Arizona decided Talley Industries and Woolworth. Those decisions engendered substantial hope that courts — and, ultimately, state revenue agencies — would analyze unitariness not on the basis of a “checklist” or as a knee-jerk reaction to some superficial facts, but rather on the basis of seeking to implement the whole purpose of unitary apportionment. That purpose is, of course, reflecting the amount of income earned in a particular taxing jurisdiction. In other words, was the profitability of the ski resort affected by the operations of AIG? It would seem that merging the incomes and apportionment factors of the ski resort with those of AIG would cause a gross distortion of the profitability of the two distinct businesses.

Yesterday, on June 17, 2015, three state tax bills were favorably reported to the United States House of Representatives (House) by the House Judiciary Committee (House Judiciary) after considering each during a half-day markup. The bills that were advanced included: (1) the Mobile Workforce State Income Tax Simplification Act (Mobile Workforce, H.R. 2315); (2) the Digital Goods and Services Tax Fairness Act (DGSTFA, H.R. 1643); and (3) the Business Activity Tax Simplification Act (BATSA, H.R. 2584).

Mobile Workforce State Income Tax Simplification Act

The Mobile Workforce bill was the first considered and seeks to establish a clear, uniform framework for when states may tax non-resident employees that travel for work. As advanced, the bill generally allows states to impose income tax compliance burdens on non-resident individuals only when the non-resident works in a state other than their state of residence for more than 30 days in a year. The bill also prevents those states from imposing a withholding requirement on employers for wages paid to such employees. Three proposed amendments seeking to limit the adverse revenue impact to New York were discussed and rejected. The Mobile Workforce bill was then favorably reported to the House by a vote of 23-4.

Digital Goods and Services Tax Fairness Act

DGSTFA would implement a uniform sourcing framework for states and localities seeking to tax digital goods and services. In doing so, the bill prevents any state or locality from imposing multiple or discriminatory taxes. Of the three pieces of legislation considered yesterday, only the DGSTFA was amended. The amendment, offered by the bill’s lead sponsor Representative Lamar Smith, was technical in nature and did not change the basic protections the bill would provide. At the markup, Chairman Goodlatte noted that the National Governors Association (NGA), which had previously voiced objections, was no longer opposed to the legislation after the revisions—though the NGA testimony indicated that the organization could not support the legislation without addressing the remote seller sales tax nexus issue.

The first technical changes in the adopted amendment were to the definitions of delivered or transferred electronically and provided electronically. The amendment added the term digital good and digital service after each respective term of art to clarify that digital goods are delivered or transferred electronically, whereas digital services are provided electronically. The second technical change was to the definition of digital good. In modifying the term, the amendment clarifies that streaming and other similar digital transmissions that do not “result in the delivery to the customer of a complete copy of such software or other good, with the right to use permanently or for a specified period” are not digital goods and would instead fall under the definition of a digital service.

Business Activity Tax Simplification Act

BATSA would codify the prerequisite of physical presence for a state to impose a direct tax on a non-resident business. BATSA would modernize the existing federal protection against state income taxation offered under P.L. 86-272 to include solicitation for sales of intangible property and services (as opposed to just solicitation of sales of tangible personal property). The bill also sets forth specific criteria for the determination of whether a person has a physical presence in a state. To have physical presence under BATSA, the business must: (a) have employees assigned to the state; (b) use an in-state agent to establish or maintain a market in the state, provided the agent does not perform services for anyone else during the taxable year; or (c) lease or own tangible personal property or real property in the state. This is the same physical presence standard that is included in the Remote Transactions Parity Act, which was introduced on Monday. Both bills also include a de minimis physical presence exception for any seller that has an in-state presence (i) for less than 15 days or (ii) to conduct limited or transient business activity. Lastly, BATSA adopts a Joyce apportionment methodology as opposed to a Finnigan methodology for certain combined and consolidated returns.

Like Mobile Workforce, several amendments were offered and subsequently rejected. Unlike the two other bills, which generally enjoyed bipartisan support, BATSA was ultimately approved by a party-line vote of 18-7.

Practice Note

These three pieces of legislation were advanced just two days after the Remote Transactions Parity Act was introduced by Representative Jason Chaffetz, who also sits on the House Judiciary Committee. Throughout the markup, members from both sides of the aisle expressed support for the Remote Transactions Parity Act, which was not on yesterday’s agenda. Each of the favorably recommended bills had been approved by the House Judiciary Committee in prior years, but did not advance in the House or U.S. Senate. With these three bills, the Internet Tax Freedom Act extension, and the marketplace sales tax bills, there are probably now more pieces of federal legislation involving state tax than ever before. It will be interesting to see if Congress acts on any of them in the near future.

On May 18, the U.S. Supreme Court issued its decision in Comptroller of the Treasury of Maryland v. Wynne. In short, the Court, in a five-to-four decision written by Justice Alito, handed the taxpayer a victory by holding that the county income tax portion of Maryland’s personal income tax scheme violated the dormant U.S. Constitution’s Commerce Clause.

Specifically, the Court concluded that the county income tax imposed under Maryland law failed the internal consistency test under the dormant Commerce Clause, because it is imposed on both residents and non-residents with Maryland residents not getting a credit against that Maryland local tax for income taxes paid to other jurisdictions (residents are given a credit against the Maryland state income tax for taxes paid to other jurisdictions).

The Supreme Court emphatically held (as emphatically as the Court can be in a five-to-four decision) that the dormant Commerce Clause’s internal consistency test applies to individual income taxes. The Court’s holding does create a perilous situation for any state or local income taxes that either do not provide a credit for taxes paid to other jurisdictions or limit the scope of such a credit in some way.

The internal consistency test—one of the methods used by the Supreme Court to examine whether a state tax imposition discriminates against interstate commerce in violation of the dormant Commerce Clause—starts by assuming that every state has the same tax structure as the state with the tax at issue. If that hypothetical scenario places interstate commerce at a disadvantage compared to intrastate commerce by imposing a risk of multiple taxation, then the tax fails the internal consistency test and is unconstitutional.

Although the Wynne decision does not address the validity of other taxes beyond the Maryland county personal income tax, the decision does create significant doubt as to the validity of certain other state and local taxes such as the New York State personal income tax in the way it defines “resident.” New York State imposes its income tax on residents on all of their income and on non-residents on their income earned in the state; this is similar to the Maryland county income tax at issue in Wynne.

“Resident” is defined as either a domiciliary of New York or a person who is not a domiciliary of New York but has a permanent place of abode in New York and spends more than 183 days in New York during the tax year. N.Y. Tax Law § 605. (New York City has a comparable definition of resident.) N.Y.C. Administrative Code § 11-1705. Thus a person may be taxed as a statutory resident solely because they maintain living quarters in the state and spend more than 183 days in the state, even if those days have absolutely nothing to do with the living quarters; this category of non-domiciliary resident is commonly referred to a “statutory resident.” As such, under New York’s tax scheme, a person can be a resident of two states—where domiciled and where a statutory resident—and thus be subject to taxation on all of their income in both states.

Although New York State grants a credit to residents for taxes paid to another jurisdiction, that credit is only for taxes paid “upon income derived” from those other jurisdictions. N.Y. Tax Law § 620. As such, New York State does not grant a credit for taxes paid to another jurisdiction on income earned from intangible property, such as stocks, because income earned from intangible property is not ‘derived from’ any specific  jurisdiction.

To illustrate using an example, suppose an investment banker is unquestionably a domiciliary of New Jersey and has an apartment, i.e., permanent place of abode, in New York that he uses only occasionally. Further, suppose that the investment banker spends more than 183 days in New York during a tax year by going to his office in New York on most workdays. In such a case, the investment banker is a resident of both New Jersey and New York and subject to tax as a resident in both states on his entire worldwide income. New York does not give a credit for taxes paid to New Jersey on income derived from intangible property, and thus the investment banker pays tax on this income twice, once to New Jersey and once to New York, clearly disadvantaging interstate commerce and resulting in double taxation.

This is not some hypothetical example. This is actually the fact pattern in In the Matter of John Tamagni v. Tax Appeals Tribunal of the State of New York, 91 N.Y.2d 530 (1998). In that case, the New York Court of Appeals (New York State’s highest court) held that New York State’s taxing scheme did not violate the dormant Commerce Clause and did not fail the internal consistency test. The validity of the Court of Appeals’ decision is seriously called into question under the Wynne case.

The Court of Appeals, relying upon Goldberg v. Sweet, held that the dormant Commerce Clause did not apply to residency-based taxes because those taxes were not taxing commerce, but rather a person’s status as a resident. However, the U.S. Supreme Court’s decision in Wynne not only repudiates the very dicta from Goldberg v. Sweet cited by the New York Court of Appeals in Tamagni, but the U.S. Supreme Court also determined that even if a state has the power to impose tax on the full amount of a resident’s income, “the fact that a State has the jurisdictional power to impose a tax [under the Due Process clause of the Constitution] says nothing about whether that tax violates the Commerce Clause.” After Wynne, it is clear that the dormant Commerce Clause applies to residency-based personal income taxes.

The second reason that the vitality of the Tamagni decision is in question is its application of the internal consistency test. The Court of Appeals held that even if the dormant Commerce Clause applied, the internal consistency test was not violated because the tax at issue was imposed upon a purely local activity and thus could not violate the Complete Auto tests. However, as discussed above, New York State’s lack of a credit for taxes paid to other jurisdictions mirrors the lack of a credit under Maryland’s county income tax scheme.

New York State taxpayers should be cognizant of the Wynne decision and should consider filing refund claims if they have paid— or will pay—tax to New York State as a statutory resident (i.e., not as a New York domiciliary). One would expect the New York State Department of Taxation and Finance to be quite resistant to granting such refunds and likely to vigorously defend the existing taxing scheme.

It may be worthwhile to note that this problem of double taxation was acknowledged and addressed in an agreement executed in October 1996 by the heads of the revenue agencies of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. Under that agreement, the “statutory resident” state would provide a credit for the taxes paid by the individual on his or her investment income to his/her state of domicile. Unfortunately, that agreement was never implemented through legislation— maybe now is the time for that to be done.

Finally, a word about New York City: New York City imposes a personal income tax on residents, allowing no credit for taxes paid to other jurisdictions. However, New York City does not impose a tax on non-residents, making its personal income tax different than the Maryland county income tax. Thus, the constitutionality of the New York City personal income tax is not specifically addressed by the U.S. Supreme Court’s decision. However, similar to the New York State definition of resident, a person can be a resident in two different jurisdictions under the New York City definition of resident. As such, New York City’s personal income tax could be imposed twice on a person if the person is a domiciliary of one state and a statutory resident in another. Thus, the tax potentially fails the internal consistency test.

The United States Supreme Court released a unanimous decision today holding that the Tax Injunction Act (TIA), 28 U.S.C. § 1391, does not bar suit in federal court to enjoin the enforcement of Colorado notice and reporting requirements imposed on noncollecting out-of-state retailers. See Direct Marketing Ass’n v. Brohl, No. 13-1032, 575 U.S. ___ (March 3, 2015), available here. These requirements, enacted in 2010, require retailers to (1) notify Colorado purchasers that tax is due on their purchases; (2) send annual notices to Colorado customers who purchased more than $500 in goods in the preceding year, “reminding” these purchasers of their obligation to pay sales tax to the state; and (3) report information on Colorado purchasers to the state’s tax authorities. See Colo. Rev. Stat. § 39-21-112(3.5). The TIA provides that federal district courts “shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law.”

The Court’s Opinion

The Court held that although the notice and reporting requirements are part of Colorado’s overall assessment and collection process, none of the requirements constitute an “assessment,” “levy,” or “collection” within the meaning of the TIA. Specifically, the Court looked to the Internal Revenue Code (IRC) to determine that the terms are “discrete phrases of the taxation process that do not include informational notice or private reports of information relevant to tax liability.” See Slip Op. at 5-8 (noting that no “assessment” or “collection” within the meaning of the IRC occurs until there is a recording of the amount the taxpayer owes the Government, which the notice and reporting requirements precede).  Justice Thomas, who authored the opinion, concluded that “[t]he TIA is keyed to the acts of assessment, levy, and collection themselves, and enforcement of the notice and reporting requirements is none of these.” Id. at 9.

The Court rejected the Tenth Circuit’s reliance on (and expansive interpretation of) the term “restrain” in the TIA.  Justice Thomas explained that such a broad reading of the statute would “defeat the precision” of the specifically enumerated terms and allow courts to expand the TIA beyond its statutory meaning to “virtually any court action related to any phase of taxation.” Id. at 11.  Instead, he assigned the same meaning to “restrain” that it has in equity for TIA purposes, which is consistent with its roots and the Anti-Injunction Act (the TIA’s federal counterpart).  Therefore, the Court concluded that “a suit cannot be understood to ‘restrain’ the ‘assessment, levy or collection’ of a state tax if it merely inhibits those activities.” Id. at 12.

The Court’s decision took “no position on whether a suit such as this one might nevertheless be barred under the ‘comity doctrine,’” under which federal courts – as a matter of discretion, not jurisdiction – refrain from “interfering with the fiscal operations of the state governments in all cases where the Federal rights of persons could otherwise be preserved unimpaired.” Id. at 13. The Court left it to the Tenth Circuit on remand to determine whether the comity argument remained available to Colorado.  Id.

Justice Kennedy’s Concurrence

Justice Kennedy joined the Court’s opinion, but wrote separately to take the opportunity to point out his views on the physical presence standard for sales and use tax purposes established by the Court in Quill Corp. v. North Dakota more than 20 years ago. 504 U.S. 298 (1992). Citing to the far-reaching systematic and structural changes in the economy caused by Internet commerce, Justice Kennedy expressed his view that “it is unwise to delay any longer a reconsideration of the Court’s holding in Quill . . . [because it] now harms States to a degree far greater than could have been anticipated earlier.” Brohl (Kennedy, J., concurring at 3). He went on to state that Quill “should be left in place only if a powerful showing can be made that its rationale is still correct.” Id. at 3-4. While Justice Kennedy noted that Brohl was not the proper case to resolve this issue, he requested litigants to bring “an appropriate case for this Court to reexamine Quill.” Id. at 4.

Practice Note:  While the Court’s opinion can certainly be viewed as a taxpayer victory, it is overshadowed by Justice Kennedy’s concurrence calling for the reconsideration of Quill. In terms of the main issue resolved by Justice Thomas, the door to the federal courts is now open—at least insofar as the TIA is concerned—to state tax cases that do not directly involve the assessment, levy or collection of tax. Because a federal court is generally a more favorable forum for taxpayers to litigate, we expect additional attempts to resolve more tangential state tax issues in the federal court system.

A New York State Division of Tax Appeals administrative law judge (ALJ) recently determined that a banking corporation was not required to hypothetically use a net operating loss (NOL) deduction to decrease its entire net income in a year in which its banking corporation franchise tax liability under Article 32 of the New York Tax Law (bank tax) was not measured by the entire net income base.  Matter of TD Holdings II, Inc., DTA No. 825329 (N.Y. Div. Tax App. Jan. 22, 2015).  This case is a sterling example of how long-held and long-applied state tax audit policies can be successfully challenged.  Taxpayers – in several states at least – can rely on the state’s adjudicatory process to ensure that logical results that are consistent with legislative intent are ultimately applied.  McDermott represented the taxpayer in this case.

Though the bank tax has been repealed effective January 1, 2015, during the years at issue, the tax was imposed on one of four alternate bases, whichever resulted in the highest tax:

  • A tax on entire net income;
  • A tax on taxable assets;
  • A tax on alternative entire net income; or
  • A minimum tax.

Note that New York’s current general business franchise tax is similarly imposed on a number of alternative bases, and that banking corporations are now subject to that tax.  See N.Y. Tax Law § 210.

In the case at issue, TD Holdings II, Inc., and certain of its disregarded subsidiaries (collectively, TD) had approximately $9 million of New York NOLs available to carry forward to its 2006 tax year.  However, for 2006, TD’s bank tax liability on its asset base was greater than its bank tax liability computed using its entire net income base—even without application of an NOL deduction.  Therefore, because TD was not required to pay tax based on the income base, it argued that it should not have to hypothetically use any portion of its available New York NOLs to reduce its entire net income base in the 2006 tax year, thereby reducing its New York NOLs available for carry forward to later years.

The Division of Taxation, arguing that because the Tax Law provided that a corporation’s New York NOL deduction in a given tax year is “presumably the same as” its federal NOL deduction for that same year, asserted that TD had to take a New York NOL deduction in 2006 that equaled its federal NOL deduction despite the fact that TD was not required to pay bank tax on the income base.

The ALJ agreed with TD, holding that TD “was not required by the plain language of the statute to hypothetically apply [its] New York NOL to an entire net income that was already sufficiently low enough to cause the use of an alternative tax base,” and that there is no statutory prohibition against a taxpayer using a New York NOL deduction that is less than its corresponding federal deduction notwithstanding statutory language that prevents a taxpayer from taking a New York NOL deduction that exceeds its federal deduction.  The ALJ also agreed with TD’s application of the legislative history and policy behind New York’s NOL deduction, which is “to ensure that taxpayers with fluctuating earnings would not be punished compared to those with steady earnings.”  TD argued and the ALJ agreed that to accomplish the legislature’s goal of allowing a taxpayer to offset its high tax liability in profitable years with losses incurred in unprofitable years, “the applicability of a NOL deduction must be tied to a taxpayer’s income.”  The ALJ concluded that because “income” was not used as a basis for computing TD’s bank tax, it was unnecessary for TD to claim a hypothetical New York NOL deduction in the 2006 tax year.

ALJ determinations are non-precedential; however, by expressly providing that the maximum amount of NOL that can be carried over and deducted in a taxable year is the amount that reduces the taxpayer’s tax on allocated business income (the former entire net income base) to the higher of the tax on capital or the fixed dollar minimum, the TD Holdings II decision is important for taxpayers to consider when computing the pool from which their “prior NOL conversion subtraction” will be computed.  Under the new law, taxpayers are afforded a “prior NOL conversion subtraction” for NOLs generated in tax years beginning before January 1, 2015.  As a result of the TD Holdings II case, taxpayers subject to the bank tax or the corporation franchise tax imposed under Article 9-A for tax years beginning before January 1, 2015, may have a larger pool of pre-reform NOLs from which to compute their prior NOL conversion subtraction.

For more detailed information see McDermott Will & Emery’s On the Subject regarding this case.

In this article, McDermott partner Arthur R. Rosen interviews Art Rosen, whom he claims to “know quite well,” about vexing state tax litigation.  One instance that he found troubling came after he and two other taxpayer representatives presented their explanation of a case during a settlement hearing, only to have a Department of Revenue representative respond that they weren’t there to discuss the issues!

Read the full article.