KPMG reports - Florida (database access); Indiana (sourcing intangibles); Mississippi (affiliated groups); Texas (exemption for aircraft) 

February 24: 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).


  • Florida - The Department of Revenue issued guidance that narrowly interprets the income-producing activity test. A taxpayer sold services that required it to collect, transmit, and store certain information and data. The information was formatted into a readable report or layout, and stored for customer use at the taxpayer’s data centers across the country. The Department concluded that each transaction in which the taxpayer provided services to a Florida customer would be included in the Florida sales factor numerator. Also, the Department noted that a specific Florida rule provides that charges to Florida customers for direct access to a database are considered Florida sales.


  • Indiana - The Department of State Revenue, in two letters of findings, determined that receipts from licensing intangible property and providing services to Indiana franchisees were properly sourced to Indiana.


  • Mississippi - The Mississippi Supreme Court held that gaming license fee credits earned by certain affiliated group members could be used to offset the tax liability of the entire Mississippi affiliated group.


  • Texas - A Texas state appellate court held that a taxpayer qualified for a sales and use tax exemption for aircraft, despite a long-standing policy of the Texas Comptroller. The taxpayer was authorized to conduct passenger-carrying flights for compensation under Part 91 of the Federal Aviation Administration (FAA) regulations, but, due to the nature of its business, was not required to obtain additional certifications and licenses from the FAA. The taxpayer subsequently purchased two helicopters with a sales and use tax exemption certificate that identified the taxpayer as a “licensed or certified carrier.” The Texas Comptroller assessed use tax on the helicopter purchases, citing a “long-standing policy” that simply holding an FAA Part 91 authorization (absent additional certifications or licenses) does not qualify a taxpayer as a “licensed or certificated carrier” for purposes of qualifying for the exemption.



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