Tax Headlines


Illinois ~ Corporate, Personal Income Taxes: Business Location Efficiency Incentive Act Continued; Changes Made to Angel Investment Credit

Illinois legislation provides for the continuation, validation, and re-enactment of the Business Location Efficiency Incentive Act and also makes changes to the conditions under which a business venture may be registered as a qualified business for the angel investment credit against the corporate and personal income tax.

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California ~ Corporate Income Tax: Ruling Addresses Whether Sale of Stock Gives Rise to Business or Nonbusiness Income

The California Franchise Tax Board addresses whether a sale of stock gives rise to business or nonbusiness income for corporation franchise and income tax purposes when one corporation purchases stock in another corporation with which it has preexisting operational ties with the intent to integrate the target corporation into the corporation’s unitary business operations, but the intended integration does not occur and the stock in the target corporation is later sold.

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Government Entitled to Recover Erroneous Refund; Oil Company’s Refund Counterclaim for Second Tax Year Denied (ConocoPhillips Company, DC Okla.)

The government was entitled to recover an erroneous refund it paid to an oil company for one tax year and the oil company’s refund claim for a second tax year was denied. The closing agreement the IRS and the oil company had entered into did not allow the oil company to increase its tax basis in the pipelines or otherwise claim a tax deduction for future dismantling, removal and restoration (DR&R) costs for the pipeline interests it acquired in the tax years at issue.

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New York ~ Corporate, Personal Income Taxes: MCTMT Ruled Unconstitutional, Remains in Effect

A New York court has ruled that the metropolitan commuter transportation mobility tax (MCTMT) was unconstitutionally passed by the New York Legislature. The tax, which is also referred to as the Metropolitan Transportation Authority (MTA) payroll tax, applies to certain employers and self-employed individuals engaging in business within the Metropolitan Commuter Transportation District (MCTD).

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Illinois ~ Estate Tax: Adopted Rule Extends Rights to Civil Union Parties

The Illinois Attorney General has adopted an Illinois estate and generation-skipping transfer tax rule to conform the tax provisions to the terms of a 2010 law under which a party to a civil union is entitled to the same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by state law to spouses. The specific purpose of the rule is to extend to either same- or opposite-sex parties of a civil union the ability to claim the federal marital deduction, the federal Q-TIP election, and the Illinois Q-TIP election as deductions for purposes of estate taxation normally restricted to opposite-sex married couples.

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Idaho ~ Personal Income Tax: Shareholders Had Insufficient Basis in S Corporation to Claim Net Operating Loss Deduction

S corporation shareholders had insufficient basis in the S corporation to claim a net operating loss (NOL) deduction on their Idaho personal income tax return. The taxpayers, along with several other couples, had purchased land in Idaho. Subsequently, they began operating as a partnership, in which they were all equal partners. The land was thereafter transferred to the partnership.

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