KPMG reports - California (nexus); D.C. (high-tech exemption); Michigan (apportionment); Washington (website taxation)  

Today’s edition, for December 10, 2012, includes the following topics (listen to the podcasts; to read text, click on the links below).

• California [PDF 24 KB]: The Franchise Tax Board (FTB) issued a Technical Advice Memorandum, finding the nexus standard to apply in determining whether sales were required to be “thrown back” to California in years prior to the adoption of the state’s economic nexus standards is, for tax beginning before 2011, taxpayers must have a physical presence in a foreign jurisdiction to avoid throwback.
• District of Columbia [PDF 24 KB]: The D.C. Court of Appeals held that a taxpayer performing certain high-technology activities and operating out of government-owned facilities qualified for a corporate franchise tax exemption. The court held that a company maintaining a workforce in D.C. was able to claim the exemption, despite not having dominion or control over an office.
• Michigan [PDF 24 KB]: The Michigan Court of Appeals found that an out-of-state taxpayer’s proceeds from the sale of its interest in a vodka product line were to be excluded from the denominator of the taxpayer’s single business tax sales factor. The court rejected the taxpayer’s position and instead found that the gain was not from the “use” (read "sale") of the product-line intangibles, but was from the complete transfer of the brand. The court remanded the case to the tribunal to address the taxpayer’s argument that it was entitled to use an alternative apportionment formula.
• Washington [PDF 22KB]: The Department of Revenue issued guidance concerning whether websites are taxable as personal property. The guidance encourages taxpayers to provide the best possible breakdown of the “costs” involved with the website, as taxability is determined on a case-by-case basis.