KPMG reports: Los Angeles, Tennessee, Vermont

KPMG reports: Los Angeles, Tennessee, Vermont

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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  • City of Los Angeles: A tax amnesty program extends from October 1, 2020 through December 17, 2020. Under the program, both registered and unregistered businesses can apply to receive a waiver of penalties on debts associated with various taxes administered by the city. Interest waivers are not available. Taxpayers may also request an installment agreement for a term of not more than six months. Read an October 2020 report

  • Tennessee: The Department of Revenue ruled that a financial institution was not doing business in Tennessee and was not subject to Tennessee franchise and excise tax. The activity was limited to owning interests in loans and collecting income from mortgaged property. Under Tennessee law,  a financial institution is not deemed to be doing business in Tennessee if its only activity in the state is “the ownership of an interest in a loan … attributed to this state and in which the payment obligations were solicited and entered into by a person that is independent and not acting on behalf of the owner.” The Department concluded that the taxpayer qualified for this exception. Read an October 2020 report

  • Vermont: The state’s Supreme Court—in a case concerning whether gain from the sale of two FCC licenses was allocated to Vermont—held that Vermont was the taxpayer’s commercial domicile and thus that the licenses were located (had a situs) in Vermont. The licenses allowed the taxpayer to broadcast in New York, but were not used to do so. For Vermont tax purposes, the gain constituted nonbusiness income that would be allocated to Vermont if the licenses were located in Vermont, or if Vermont was the taxpayer’s commercial domicile. Because the licenses lacked a location or situs, under Vermont’s regulation, the gain was required to be allocated to the taxpayer’s commercial domicile. Accordingly, the Vermont high court agreed with the Commissioner, and applied a test that looked at a variety of factors to conclude that Vermont was the taxpayer’s commercial domicile. Read an October 2020 report

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