KPMG reports - Michigan (royalties); Nebraska (tax reform); Pennsylvania (business income); Virginia (sales price) 

January 28:   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 28, 2013, includes the following topics (listen to the podcasts; to read text, click on the links below).


  • Michigan [PDF 24 KB]: The Michigan Appeals Court determined that certain payments for the right to access databases are considered royalties under the Single Business Tax (SBT) Act when the taxpayer retains a proprietary interest in the content hosted on its database.
  • Nebraska [PDF 23 KB]: The governor proposed legislation that would eliminate the individual and corporate income tax and repeal sales tax exemptions to offset the revenue impact.
  • Pennsylvania [PDF 26 KB]: The Pennsylvania Supreme Court held that a taxpayer’s gain from the sale of timberland was business income under the so-called “functional” test. The high court noted that making a business decision to sell land did not convert it to an unrelated asset. Furthermore, the sale of timberland was not a distinct business, but a strategic decision in furtherance of the taxpayer’s overall operations.
  • Virginia [PDF 23 KB]: The Tax Commissioner determined that “sales price” includes services and lump-sum shipping and handling fees. The Commissioner concluded that there is no specific exemption or exclusion for purchasing fees and that shipping fees must be separated from handling fees on an invoice to qualify as exempt transportation charges.



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