Note from the Editors
Welcome to the January 2025 edition of The BR State + Local Tax Spotlight. We know the importance of remaining up-to-date on State + Local Tax developments, which appear often and across numerous jurisdictions. Staying informed on significant judicial decisions and legislative developments helps tax departments function more efficiently, along with improving strategy as well as planning. That is where The BR State + Local Tax Spotlight can help. In each edition, we will highlight important State + Local Tax developments that could impact your business. In this issue, we will be covering:
- State Tax Policy - The Fine Line Between Delegation and Abdication
- Illinois Loses First Shot at Interchange Fees on State and Local Taxes
- Supreme Court of Arkansas Allows Corporation to Allocate Interest Expense Incurred to Fund Corporate Spin-off
- Longtime Iowa Taxpayers Lose Out on Capital Gains Deduction
- Supreme Court of Ohio Affirms Denial of Healthcare Service Provider’s Commercial Activity Tax Refund Claim
We invite you to share The BR State + Local Tax Spotlight with your colleagues and visit Blank Rome’s State + Local Tax webpage for more information about our team. Click here to add State + Local Tax to your subscription preferences.
Updates from previous editions:
In the December 2023 edition of The BR State+ Local Tax Spotlight, Eugene J. Gibilaro authored an article titled “State Tax v. Local Tax – Is There a Difference?” in which he discussed the Pennsylvania Supreme Court’s decision in Zilka v. Tax Review Board. After that article was published, we provided updates that the Appellant in that case (Diane Zilka) had petitioned the U.S. Supreme Court for a writ of certiorari, and in a June 2024 order, the U.S. Supreme Court had invited the solicitor general to file a brief in the case. As a further update, on January 13, 2025, the U.S. Supreme Court denied Diane Zilka’s petition for certiorari.
In the March 2024 edition of The BR State+ Local Tax Spotlight, Nicole L. Johnson authored an article titled “Ruling Outside the Lines,” in which she discussed a series of rulings from the Michigan Supreme Court and Court of Appeals that centered on determining whether a company had the necessary nexus for the City of Detroit to impose income tax. Despite the Court of Appeals leaving certain issues unanswered – as discussed in Nicole’s article – on January 7, 2025, the parties involved in the ongoing litigation notified the Michigan Tax Tribunal via letter that they have reached a pending settlement resolving all claims between them. The letter does not describe the terms of the settlement. Despite the Court of Appeals leaving certain issues unanswered—as discussed in Nicole’s article—on January 7, 2025, the parties involved in the ongoing litigation notified the Michigan Tax Tribunal via letter that they have reached a pending settlement resolving all claims between them. On January 21, 2025, the Detroit City Council approved a $45,000 settlement via a voice vote.
In the December 2024 edition of The BR State+ Local Tax Spotlight, Joshua M. Sivin authored an article titled “Asphalt Company Not Liable for $2.6 Million in Sales Tax Where Judge Found No Sale,” in which he discussed an administrative law judge’s (“ALJ’s”) decision in Asphalt Emulsion Industries LLC v. North Carolina Department of Revenue. In a petition filed with the North Carolina General Court of Justice, Superior Court Division, the North Carolina Department of Revenue has appealed the ALJ’s decision.
Joshua M. Sivin and Melanie L. Lee
ARTICLES
State Tax Policy - The Fine Line Between Delegation and Abdication
By Eugene J. Gibilaro
As is true of the U.S. government, within the executive branch of state governments live administrative agencies, which state legislatures have vested with powers to implement and enforce the laws enacted by state legislatures. Read More >>
Illinois Loses First Shot at Interchange Fees on State and Local Taxes
By Mitchell A. Newmark
Illinois enacted a law that prohibits a credit card holder’s bank from charging or receiving interchange fees from merchants on the portions of transactions that include Illinois state or local taxes and gratuities, in effect starting July 1, 2025. Read More >>
Supreme Court of Arkansas Allows Corporation to Allocate Interest Expense Incurred to Fund Corporate Spin-off
By Irwin M. Slomka
A recent Supreme Court of Arkansas decision has upheld a multistate corporation’s allocation to Arkansas of 100% of its interest expenses from borrowings to fund a spin-off. Read More >>
Longtime Iowa Taxpayers Lose Out on Capital Gains Deduction
By Melanie L. Lee
The tax consequences of the sale of a business are complex, and strategizing to avoid one tax type may lead to unanticipated tax in another form. Read More >>
Supreme Court of Ohio Affirms Denial of Healthcare Service Provider’s Commercial Activity Tax Refund Claim
By Stephanie N. Terinoni
The Supreme Court of Ohio upheld the denial of Total Renal Care, Inc.’s refund claim of Ohio Commercial Activity Tax that it paid on services that it performed outside of Ohio. Read More >>
WHAT'S SHAKING: BLANK ROME STATE + LOCAL TAX ROUNDUP
Blank Rome’s nationally prominent State + Local Tax attorneys are thought leaders in the community as frequent guest speakers at various local and national conferences throughout the year. Our State + Local Tax attorneys believe it is necessary to educate and inform their clients and contacts about topics that will impact their businesses. We invite you to attend, listen, and learn as our State + Local Tax attorneys interpret and discuss key legal issues companies are facing and how you can put together a plan of action to mitigate risk and advance your business in accordance with state and local tax laws. Read More >>
© 2025 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.