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KPMG reports: California, Massachusetts, South Carolina

KPMG reports: California, Massachusetts, South Carolina

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.


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  • California: A state appeals court addressed when factors of a single-member limited liability company (SMLCC) would be included in computing the owner’s apportionment formula when the owner of the SMLLC declined to consent to California tax jurisdiction and the LLC filed and paid taxes as a standalone entity. The court held that the plain language of the statute and the legislative history illustrate that the taxpayer was to have included the property, payroll, and sales of the SMLLC in the numerators of the combined reporting group’s apportionment factors. 
  • Massachusetts: The Appellate Tax Board concluded that a retailer was not liable for sales tax that was not collected from customers during certain sales tax holidays. The customers learned of the upcoming sales tax holidays and canceled pending orders. The goods then were repurchased during the designated sales tax holidays. The Board determined that neither title nor possession passed to the customers prior to the goods being delivered (any sales that had already been delivered were not eligible to be canceled and reordered during the sales tax holiday). The Board concluded that the taxpayer (retailer) was entitled to a full abatement of taxes and penalties.
  • South Carolina: Lawmakers passed federal tax conformity legislation, and the bill was signed into law on October 3, 2018. The conformity bill applies to tax years beginning after 2017, and expands the list of IRC sections that are not adopted by South Carolina—including section 250 (providing a reduced rate for GILTI and FDII); section 163(j) (limiting business interest deductions); section 118(b)(2) (including in income any contribution by any governmental entity or civic group, other than a contribution made by a shareholder as such); and section 199A (allowing a deduction for qualified business income).  

Read more at KPMG's This Week in State Tax

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