KPMG reports - California (service contracts); Delaware (unclaimed property); Massachusetts (intercompany expenses); Texas (telecommunications) 

January 21: 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 January 21, 2013, includes the following topics (listen to the podcasts; to read text, click on the links below).


  • California [PDF 23 KB] - The State Board of Equalization announced that it had reached a settlement agreement with a computer company concerning the company’s collection and remittance of sales and use tax for optional service contracts sold with its computers. The California Court of Appeal in a 2008 case held that the company had improperly collected sales and use tax on the service contracts. Under the settlement agreement, the tax authority announced that persons who had purchased an optional service contract between April 1999 and June 2008 may be eligible for a tax refund.


  • Delaware [PDF 24 KB] - A new, limited-time unclaimed property voluntary disclosure program provides a limited lookback period. Property holders requesting participation in the new program prior to June 30, 2013, and remit full payment before June 30, 2014, will not be required to report property issued before 1996.


  • Massachusetts [PDF 24 KB] - The Massachusetts Court of Appeal upheld an Appellate Tax Board decision denying deductions for intercompany expenses claimed in tax years both before and after Massachusetts adopted a related-party expense disallowance statute.


  • Texas [PDF 24 KB] - An Administrative Law Judge held that a taxpayer could not deduct costs to provide telecommunications services that are sold along with tangible personal property, and thus denied the taxpayer’s cost of goods sold deduction.



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