State & Local

Expert Analysis

• Inside The OECD Transfer Pricing Documentation Guidance

  Excerpt from Practical Guidance

  

  The Organization for Economic Cooperation and Development's recently modified documentation guidelines can assist tax administrations in developing requirements for transfer pricing risk assessments and evaluations, and help multinational entity taxpayers demonstrate satisfaction of the arm's-length principle, says Neil Aragones at Lexis Tax.

• Calif. Tax Board Nonresident Asset Ruling Raises New Issues

  

  The California Franchise Tax Board's recent ruling on whether a nonresident's disposition of a partnership interest gives rise to California-sourced income raises new issues for sourcing gain or loss using partnership apportionment factors where unrealized receivables and inventory are involved, says Eric Coffill at Eversheds Sutherland.

• Tech Co.'s Suit May Create Hurdles For Research Tax Credits

  

  The recently filed U.S. Tax Court case Perficient v. Commissioner — challenging standards under research credit regulations that determine whether research is funded by any grant or contract — could make it difficult to substantiate research tax credits, say Dennis St. Martin and Kevin Benton at Grant Thornton.

• A Close Look At The Decentralized Effort To Tax Digital Assets

  

  Clarity on taxation is one of the biggest hurdles to mass adoption of cryptocurrency, and although digital asset innovation has consistently outpaced worldwide government regulation, recent efforts in the U.S. and elsewhere hint at an emerging standard, says Joshua Smeltzer at Gray Reed.

• Kentucky Tax Talk: Speeding Up Public Service Co. Protests

  

  Public service companies with Kentucky tax liability should consider the recent groundbreaking changes to the state’s protest procedures, particularly if they have protests pending that might be expedited in light of the new legislation, say attorneys at Frost Brown.

• Notes On Social Equity From A Former Cannabis Regulator

  

  Duane Morris’ Matthew McCarthy, former lead prosecutor in regulatory enforcement actions at the Maryland Medical Cannabis Commission, shares observations on the multifaceted efforts by government and the cannabis business community to build a more equitable industry and foster diverse ownership, highlighting the role of data reporting and community outreach.

• Watching The Legal Sports Betting Ecosystem Take Shape

  

  The number of U.S. states getting in on the recently legalized $4.29 billion sports-betting industry is on the rise, and stakeholders must be aware that the regulatory scheme looks dramatically different from state to state, say James Johnston and Louis DiLorenzo at Davis+Gilbert.

• How To Address Research Expenditures Amid Uncertainty

  Taxpayers need to prepare for the significant technical and compliance challenges of following Internal Revenue Code Section 174's new rules for experimentation expenditure capitalization and amortization, notwithstanding the rules' unresolved legislative future, say tax advisers at Grant Thornton.

• Advising A Cannabis Business Amid Patchwork Of Regs

  Excerpt from Practical Guidance

  

  As the cannabis industry continues to grow, so does its widely varied patchwork of local, state and federal regulation, and practitioners should familiarize themselves with the specific rules on tax, real estate, intellectual property and banking applicable in the jurisdictions where their clients operate, say Patrick Hines and Fallon Martin at Hodgson Russ.

• Is NJ's Voluntary Transfer Pricing Initiative Really Voluntary?

  

  The New Jersey Division of Taxation's voluntary transfer pricing audit initiative promises penalty abatement to taxpayers that elect to participate and agree to the division's proposed adjustments, but the effective penalties associated with nonparticipation raise questions about the program's voluntary nature, say attorneys at McDermott.

• ​Boardroom Lessons From Shareholders' Diversity Lawsuits

  

  Corporate efforts to promote diversity, equity and inclusion in the workplace are gaining momentum, and shareholder derivative lawsuits offer important lessons on how boards may protect themselves while fostering diverse workforces and safeguarding company goodwill, say attorneys at Covington.

• Mass. Bills Will Have Broad Impact On Cannabis Industry

  

  Legislation recently passed by both chambers of the Massachusetts Legislature will make sweeping changes to the commonwealth’s cannabis industry, altering everything from municipal agreements to on-site consumption, and improving social equity while reducing businesses' tax burdens, says Cloe Pippin at Foley Hoag.

• Critiques Of NY Tax Whistleblower Bill Are Untenable

  

  Amending the New York False Claims Act to allow whistleblower actions against those who fail to file tax returns will combat invisible fraud and return stolen revenue to the state, and recent objections that the pending bill to do this would dangerously expand the act do not pass muster, say Neil Getnick and Courtney Finerty-Stelzner at Getnick & Getnick.