KPMG reports - Illinois (cloud computing); Illinois (click-through nexus); Indiana (tax credits); North Carolina (corporate tax); South Carolina (nontaxable intangibles) 

June 9: 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).

  • Illinois - A private letter ruling issued by the Department of Revenue addresses how an out-of-state taxpayer is to source receipts from the sale of certain cloud computing-related services, and concludes the taxpayer must source the services by reference to the location of the customer’s office where the services were ordered.

  • Illinois - Legislation (Senate Bill 352) aims to correct the state’s click-through nexus statute (declared unconstitutional by the state’s high court in 2013), by capturing offline relationships with in-state persons as well as online relationships.

  • Indiana - A “letter of findings” issued by the Department of Revenue addresses when taxpayers are allowed credits for taxes paid on goods used out-of-state, and concludes an out-of-state credit for taxes paid does not apply for sales taxes.

  • North Carolina - New law (House Bill 1050) makes a number of tax base changes to North Carolina’s corporate income tax laws, and includes new net loss provisions.

  • South Carolina - An administrative law judge concluded that a taxpayer was not entitled to a refund of sales taxes paid on its purchase of an IMAX theatre system, finding that the entire sales price of the movie theatre system was subject to sales tax. While trademark licenses generally are not subject to sales tax as intangibles, the contract did not allocate costs between the tangible and intangible items.

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