KPMG reports - Illinois (apportionment); Massachusetts (telecommunications); New Jersey (prewritten software); South Carolina (consulting services); Tennessee (telecommunications) 

August 26: 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.

Today’s edition, for August 26, 2013, includes the following topics (listen to the podcasts; to read text, click on the links below).

  • Illinois - New law retroactively changes the standards for when a taxpayer can request (or the Department can require) use of an alternative apportionment formula when the statutory allocation and apportionment provisions do not fairly represent the market for the taxpayer's goods, services or other sources of business income.
  • Massachusetts - The Massachusetts Department of Revenue issued guidance concerning the court’s holding in the AT&T case (i.e., amounts of taxpayer's receipts from telecommunications services originating in Massachusetts and terminating in other states to be included in the taxpayer's Massachusetts sales factor numerator). While the court applied the “operation approach” with respect to the cost of performance test, the Department stated that future regulations will call for the use of a “transactional approach.”
  • New Jersey - Governor Christie vetoed a bill that would have provided a sales and use tax exemption for sales of services performed with respect to prewritten computer software delivered electronically and used directly and exclusively in the conduct of the purchaser's business, trade or occupation.
  • South Carolina - The South Carolina Department of Revenue issued guidance addressing how a multistate taxpayer (a single employee performing engineer consulting services from his home in South Carolina) is to source receipts from providing engineering consulting services.
  • Tennessee - The Tennessee Court of Appeals held that port modem management services were taxable telecommunications services because these services included other items (e.g., telephone numbers to allow internet users to connect to dedicated point, calls from modems) that are not considered "private line" services.

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