The New York Division of Tax Appeals recently ruled in favor of a taxpayer, E. & J. Gallo Winery, holding that it met the statutory requirements of a âQualified New York Manufacturerâ (âQNYMâ) and was therefore entitled to a reduced corporation franchise tax rate. As a result of New Yorkâs corporate tax reform, QNYMs are entitled to a reduced tax rate, including a 0% tax rate on their business income base beginning in 2014, for…
California’s long-anticipated market-based sourcing âguidanceâ is finally out. Legal Ruling No. 2022-01 provides the Franchise Tax Board’s take on how to find the market in certain business-to-business sales. Though the guidance emphasizes that a seller should look to where its direct customer receives the benefit of sales of services, it keeps with current market-based sourcing trends amongst states and directs taxpayers to source such receipts based on the location of the taxpayerâs customerâs customer. The…
The New York State Department of Taxation and Finance (âDepartmentâ) recently published guidance stating that a nonresidentâs income will be sourced to New York State unless the nonresidentâs remote work location meets the âbona fide employer officeâ exception to the âconvenience of the employer test.â Specifically, the Department addressed a question in its FAQs regarding how to source income for Personal Income Tax purposes where a nonresidentâs primary office is in New York, but the…
In the closely watched âPaula Trustâ case, the California Court of Appeal, First Appellate District held that all of a trustâs California source income is subject to California income tax even though one of the trustees was a nonresident. Steuer v. Franchise Tax Board, No. A154691 (Cal. Ct. App. 1st Dist. June 29, 2020). The trustâs non-California source income would be apportionable. California imposes income tax on 100% of a trustâs income if all trustees…