KPMG reports - Florida (income-producing activity test); Illinois (hydraulic fracturing); Michigan (use tax); New Mexico (credit application date) 

August 20:  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).

  • Florida - In a Technical Assistance Advisement, the Florida Department of Revenue further clarified its application of the income-producing activity test that applies to sales of other-than-tangible personal property. The taxpayers (a group of affiliated developers of television programming) requested guidance as to how to source their licensing fees from cable operators and advertising receipts.
  • Illinois - New law (S.B. 1715) enacted in Illinois addresses the tax treatment of hydraulic fracturing (i.e., a tax is imposed on the severance and production of oil or gas from a well on a production unit that the state has permitted, or required to be permitted, under the hydraulic fracturing regulatory provisions).
  • Michigan - A Michigan appeals court concluded the owner of a boat was liable for use tax when the newly purchased boat was brought into Michigan within 90 days of its purchase, even though the reason for the boat to be in the state was for emergency repairs (which were performed in Michigan while the boat was en route to Chicago). The court found substantial evidence to support a conclusion that the boat was not used and stored “temporarily” in Michigan.
  • New Mexico - A New Mexico hearing officer affirmed the Department's denial of a taxpayer's application for an alternative energy product manufacturer's tax credit. The hearing officer ruled that the taxpayer had failed to satisfy the credit’s employment requirement on the date when the application was mailed (December 21) even though the taxpayer would have satisfied the employment criterion on the date when the taxpayer signed the credit application (July 24). The signing date does not control because, at that point, the application had not been submitted for approval.

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