Advantous Law

Blaike Lee Ordes, Advantous Law Associate, teamed up with Jason DeCuir, Advantous Law Founding Partner, to present “SALT Cases and Litigation Updates” and “SALT Policy Trends” at Tax Executives Institute’s 2024 Tax School yesterday. Blaike discussed recent notable tax decisions, while Jason provided updates on trending state and local tax issues and developments across the country. Thanks for having us, TEI!

The Tennessee General Assembly recently passed HB 1893/SB 2103 repealing the state’s franchise tax. The legislation, which the Governor is expected to sign, also provides a 3-year refund opportunity for businesses that paid franchise tax for periods ending on or after 3/31/2020 and reported on returns filed on or after 1/1/2021. Taxpayers in a refund position should take note that the refund period is only 6.5 months, shorter than the general statutory period, and runs from 5/15/24 thru 11/30/24. Follow the link below to see the Tennessee Department of Revenue’s guidance regarding the repeal and how taxpayers must claim a refund.

Colorado Governor Jared Polis has signed HB 2024-1041, which provides that Home Rule jurisdictions in the state which collect their own sales tax but do not use the state’s centralized electronic tax remittance system are prohibited from automatically imposing collection/remittance requirements on retailers with no physical presence in the state. Under the new law, a Home Rule jurisdiction may enter into a voluntary collection agreement with a retailer so situated, but such agreements must be made with each individual retailer – blanket requirements are now prohibited by law. The legislation comes as Wayfair, the plaintiff in the landmark lawsuit against South Dakota, is pursuing a separate lawsuit against Lakewood, Colorado, a Home Rule city, alleging its decentralized collection/reporting regime for out-of-state retailers places an undue burden on those business in violation of the Commerce Clause. It is not immediately clear how the legislation will affect the pending litigation – indeed, the new law does not address all the ways Wayfair alleges the city’s regime violates the constitution, at least not directly – but HB 2024-1041 is nevertheless a positive development for out-of-state retailers selling into Colorado. The bill is scheduled to take effect Tuesday, August 6, 2024.

Louisiana’s two-tiered system of state- and local-level sales/use levy, collection and enforcement now remains the biggest outlier among the states. The most prominent litigation challenging the system post-Wayfair (Halstead Bead, Inc. v. Richard) was dismissed on procedural grounds last year; and a constitutional amendment that would have paved the way for a centralized state and local tax regime narrowly failed at the ballot box in 2022. The state has taken steps to alleviate some burdens on out-of-state retailers, but there remains much to do. The 2025 legislative session will be fiscal session where tax bills of all types can be taken up; and there is currently a flurry of activity in the executive and legislative branches to prepare for what promises to be a very busy, impactful session.

Information on the Wayfair Colorado lawsuit can be found here: Wayfair Sues Lakewood, Colorado over Home-rule Sales Tax Complexity | TaxValet (thetaxvalet.com)

Click here for the signed bill:https://leg.colorado.gov/sites/default/files/2024a_1041_signed.pdf

leg.colorado.gov