KPMG reports: California, Chicago, New Jersey, New York State

KPMG reports: California, Chicago, New Jersey, New York

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.

  • California: There has been much confusion—and litigation—in California over whether a special tax that was presented to voters by a citizen’s initiative requires two-thirds majority approval. A state appeals court held that a San Francisco voter initiative imposing an additional tax to fund early childcare education did not require a super-majority vote for passage. This is a second decision from the appeals court holding that simple-majority voter approval is sufficient. Read a February 2021 report

  • Chicago: The city tax authority issued guidance establishing safe harbor revenue thresholds for the amusement tax and personal property lease transaction tax. The safe harbor—which is intended to relieve compliance burdens and give certainty with respect to nexus for both taxes—applies beginning July 1, 2021, to out-of-state entities that received less than $100,000 in revenue from Chicago customers during the most recent consecutive four calendar quarters. Read a February 2021 report

  • New Jersey: The Division of Taxation issued a technical bulletin (TB-100) explaining recent technical corrections to the corporation business tax law. The bulletin notes that many of the technical corrections were intended to clarify that the New Jersey combined group is treated as one taxpayer. The bulletin further provides an overview as to how this one-taxpayer treatment affects various aspects of the corporation business tax return. Read a February 2021 report

  • New York State: An administrative law judge concluded that a service that examined the effectiveness of a customer’s internet advertising campaign was a taxable information service. According to the administrative law judge, the service did not qualify for the statutory exception for furnishing information that is personal or individual in nature and that is not or may not be substantially incorporated in reports furnished to others. Under the taxpayer’s contracts with clients, the taxpayer retained the right to copy, distribute, resell, modify, and otherwise use the data it collected, as long as it did not identify its client.  Clients also had the ability to publish the information and data furnished by the taxpayer in their own reports. Read a February 2021 report

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