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KPMG reports: Kentucky, Oregon, Tennessee

KPMG reports: Kentucky, Oregon, Tennessee

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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  • Kentucky: A “frequently asked question” indicates that the bright-line sales and use tax economic nexus thresholds (200 or more sales or $100,000 in sales) do not apply to Kentucky’s corporate income tax or limited liability entity tax. A company that has any amount of sales, property, or payroll in the state of Kentucky is required to file a corporate income tax or limited liability entity tax return.
  • Oregon: The Oregon Tax Court determined that legislation to decouple from the IRC section 199A deduction for qualified business income did not require a supermajority vote. The tax court reasoned that the legislation did not “levy a tax” but instead merely changed the tax base of an already existing tax. Therefore, the legislation was not subject to the three-fifths majority vote requirement.
  • Tennessee: A state appeals court concluded that the Department of Revenue had improperly reclassified a taxpayer’s business activities for purposes of the state business tax. The court rejected the state’s determination that all sales of the tangible personal property sold, plus the labor charges for installing the property, should be treated as service receipts. The court explained that such a classification was improper because a majority of the taxpayer’s gross receipts was attributable to the sale of property. 


Read more at KPMG's This Week in State Tax

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