KPMG reports - Colorado (sales tax); Indiana (nexus); Kentucky (consolidated groups); New Jersey (click-through nexus) 

July 14:  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.

This week’s edition includes the following topics (listen to the podcasts; to read text, click on the links below).

  • Colorado - The Colorado Supreme Court, in reversing a lower court decision, held that a taxpayer’s purchases of machinery used to produce and distribute electricity were subject to sales tax. The state high court concluded that the exemption from sales and use tax for purchases of machinery and tools used in manufacturing tangible personal property did not apply to electricity because the general assembly had decided to tax electricity as a “service” and not as tangible personal property.

  • Indiana - The Department of Revenue concluded that economic nexus applies for corporate income tax purposes. In a “letter of findings,” a Delaware intangible holding company was found to have nexus with Indiana when its sole contact with the state was the receipt of income from licensing intangibles to in-state affiliates; and thus, the company was subject to adjusted gross income tax because it had income from doing business in the state.

  • Kentucky - The Kentucky Court of Appeals held that “non-nexus members” of a consolidated group are not subject to tax in Kentucky.

  • New Jersey - Assembly Bill 3486, signed into law on June 30, 2014, adopts click-through nexus rules; make changes to the test for allocable (apportionable) operational income for corporate taxpayers; includes rules for application of tax paid by a partnership for non-resident partners and rules preventing a partnership from filing refund claims for non-resident partners; and revises the rules for net operating losses (NOLs).

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