KPMG reports - Alabama (amusement services); Indiana (in-state storage); New Jersey (parts); Washington (B&O nexus) 

January 13: 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).

  • Alabama - An Administrative Law Judge concluded a taxpayer teaching various art classes to students (who were allowed to bring food and alcoholic beverages to class) was providing nontaxable art lessons—and not providing admission to a place of amusement.

  • Indiana - The Department of Revenue determined that the presence of catalogs stored in Indiana prior to distribution does not create income tax or sales and use tax nexus for out-of-state companies. The Department found that: (1) the presence of the catalogs neither generated income nor constituted "doing business;" and (2) the catalogs alone fell short of the physical presence standard and were not sufficient to create “substantial nexus” with Indiana.

  • New Jersey - The New Jersey Tax Court held that a taxpayer was liable for use tax on purchases of parts used to assemble pretzel warmers in New Jersey even though the warmers were subsequently shipped out of state. The court found the warmers were not part of the process of manufacturing the frozen dough.

  • Washington - A state appeals court held that an Oregon corporation having all its retail fuel establishments located in Oregon, but that made wholesale sales of fuel to Washington customers with its own trucks, had B&O tax nexus. The court concluded market-facing activities were not required to create nexus, but that delivery by the taxpayer in its own trucks was sufficient.

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