KPMG reports - California (communications user tax); Illinois (erroneously collected sales tax); Missouri (passive interest income); Texas (costs of goods sold) 

August 5:  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 5, 2013, includes the following topics (listen to the podcasts; to read text, click on the links below).


  • California - A California appellate court held that the federal Internet Tax Freedom Act did not preempt certain telecommunications services from Los Angeles’ communications user tax.


  • Illinois - An Illinois appeals court reversed a lower court's grant of summary judgment for a retailer that had erroneously collected sales tax on digital television converter box sales and was sued for violating Illinois' consumer protection law.


  • Missouri - The Missouri Administrative Hearing Commission ruled that the passive interest income of a taxpayer (a provider of intrastate long-distance telephone service that was incorporated and domiciled outside of Missouri) could be allocated outside of Missouri.


  • Texas - The Texas Comptroller issued guidance addressing the Texas franchise tax cost of goods sold (COGS) deduction under a new policy that aligns the Texas franchise tax COGS deduction with IRC section 263A and allows a deduction for certain indirect labor costs, such as supervisory labor.



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