KPMG reports - California (apportionment); Iowa (manufacturing exemption); Michigan (business tax); Texas (manufacturing-related exemption) 

August 18:  KPMG’s This Week in State Tax—produced weekly by KPMG’s State and Local Tax practice—focuses on recent state and local tax developments and features a series of short podcasts presented by KPMG tax professionals. Text of the podcasts is also available.

This week’s edition includes the following topics (listen to the podcasts; to read text, click on the links below).


  • California - The Franchise Tax Board ruled that gains from a taxpayer’s post-bankruptcy asset sales were includable in the taxpayer’s sales factor and were not excludable under the state’s occasional sale exclusion for apportionment purposes.


  • Iowa - The Department of Revenue rejected a claim by a taxpayer (a national chain of sandwich shops) that it satisfied the statutory definition of a manufacturer for purposes of the manufacturing exemption from use tax. Hence, the machinery, tools, and equipment that the taxpayer purchased for use in making sandwiches did not qualified for the machinery and equipment exemption.


  • Michigan - The Michigan Department of Treasury filed a motion asking the Michigan Supreme Court for a rehearing in a case allowing a taxpayer to use the Multistate Compact Election in computing Michigan Business Tax liability. For background read TaxNewsFlash-United States.


  • Texas - A Texas appeals court affirmed a district court decision, in favor of the Comptroller, holding that an oil and gas producer did not qualify for a manufacturing exemption on certain purchases of machinery and equipment used in the process of extracting natural gas and oil.



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