KPMG reports - Indiana (throwback rule); New York City (apportionment); South Carolina (combined reporting); Texas (sale for resale exemption) 

March 10:  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).


  • Indiana - The Indiana Department of Revenue in a letter of findings concluded that the Finnigan approach does not apply for consolidated returns. The taxpayer (a manufacturer domiciled in Indiana) was required to include certain receipts in its Indiana sales factor numerator per Indiana’s “throwback rule” (i.e., numerator of the sales factor includes receipts from sales of tangible personal property that are shipped from Indiana if the taxpayer is not taxable in the state of the purchaser).


  • New York City - The New York City Tax Appeals Tribunal found that the a taxpayer /credit rating agency’s receipts are to be sourced using an audience-based methodology consistent in principle with the circulation / audience methods required to be used by other publishing companies.


  • South Carolina - The South Carolina Department of Revenue issued draft guidance as to when it will require (or when a taxpayer can request to file) a unitary combined return. The draft ruling addresses: (1) situations when combined reporting will generally be required; (2) guidance on what entities will be included in the unitary combined group; and (3) how the combined group’s income will be computed.


  • Texas - A Texas Administrative Law Judge determined that a taxpayer (electric company) was not entitled to a resale exemption for its purchases of data processing services because the services were not an integral part of the sale of electricity. Furthermore, the taxpayer failed to produce valid exemption certificates within 60 days to support that certain of its sales were exempt.



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