Practice/Industry Group Overview
Sutherland’s SALT team applies a collaborative approach to providing tax planning, litigation and policy advocacy.
As state and local jurisdictions evolve their tax systems and engage in increasingly sophisticated enforcement and litigation strategies, companies need sound state and local tax (SALT) advice now more than ever. Many of the country’s best-known companies turn to Sutherland’s SALT team to navigate these complex tax issues and to help them reach their business goals. We advise clients on the full spectrum of state and local tax consulting, planning, compliance, litigation and policy matters. Our SALT team’s renowned tax policy and legislative advocacy complement our tax planning and controversy support.
Sutherland has been a leader on state and local tax issues for more than 60 years, and we maintain one of the largest SALT practices in the country. Our attorneys serve as national state tax counsel to some of the world’s largest companies, including nearly 30 of the Fortune 100, and numerous other industry-leading businesses. We work with clients on the full spectrum of issues and tax types, including income, property, sales and use, and telecommunications taxes. We are deeply involved in policy and legislative issues at every level of government across the country and enjoy significant credibility with, and access to, high-level state and local tax officials.
Whenever it is in our clients’ best interests, we are prepared to fight. Experienced in every facet of tax controversies and litigation, Sutherland attorneys appear before federal and state courts and administrative bodies throughout the country.
Comprehensive services. We counsel clients on all types of state and local taxes, including income taxes, property taxes, sales and use taxes, franchise taxes, industry-specific transaction taxes and payroll taxes.
Major clients. Sutherland’s SALT practice represents almost one third of the Fortune 100 and many of the nation’s most important privately held companies.
Key relationships. Our team has deep relationships with state tax authorities, interest groups and other stakeholders that have grown through our active involvement at the Council On State Taxation (COST) and Tax Executives Institute (TEI); in state tax policy initiatives such as the Streamlined Sales Tax Project; and in client representations before state revenue departments. We are involved with the Multistate Tax Commission (MTC), Federation of Tax Administrators (FTA), National Conference of State Legislatures (NCSL) and National Governors Association (NGA).
Proactive advice. We expect that scrutiny from state and local tax authorities will continue to increase. Our attorneys draw on significant state tax planning and consulting experience when evaluating structures and taxability. We carefully analyze and document state tax decisions to rationalize planning structures when reviewed as part of a financial statement audit, and our experience defending corporations against assessments enables us to plan more effectively.
Litigation success. Clients turn to our confident and experienced SALT attorneys who understand when litigation is the smart business choice. We represent clients in state and local tax disputes in many states and localities. Applying a multidisciplinary approach to multistate tax issues, we seek to resolve matters through alternative strategies, including legislative and regulatory initiatives, and negotiated agreements.
Breadth of experience. Our team includes former general counsel to the Council On State Taxation (COST), partners from the nation’s largest accounting and law firms, and government lawyers.
Perspective. We regularly take part in federal, state and local government task forces, testify in connection with federal and state legislative matters and engage in lobbying efforts, so we understand the policies and intentions behind tax laws. For example, we provide legislative monitoring and advocacy on the state taxation of the digital economy and launched the Sutherland SALT Digital Economy Forum as a resource for our clients.
NUTS AND BOLTS
Our attorneys provide the full range of services for state and local tax matters, including:
- Consulting and planning matters
- Advise companies on restructuring their organization and activities for state and local tax efficiency
- Assist large corporations in determining the application of various apportionment provisions, including “costs of performance” methods
- Advise taxpayers in evaluating what constitutes “sales” for purposes of calculating their sales factor for state income tax purposes
- Evaluate the classification of income as “business” or “non-business” income for state income tax reporting purposes
- Provide multistate income/franchise tax planning advice on nexus, apportionment factor, unitary and other related issues
- Advise on multistate sales and use tax planning, including nexus, taxability, structuring and SSTP-derivative issues
- Conduct state tax provision reviews for financial accounting purposes, including risk analysis under FAS 109, FIN 48 and FAS 5
- Assist in obtaining negotiated and statutory tax credits and incentives
- Analyze state and local tax considerations involved in relocating a taxpayer’s business to another state
- Evaluate and modify taxpayers’ corporate organizational structures to minimize compliance costs and control effective state tax rates
- Obtain favorable advance rulings from various state departments of revenue to assist taxpayers with state tax planning activities
- Determine the proper use of net operating losses in particular states
- Determine and advise on the state tax consequences of acquisitions and dispositions of businesses
- Controversy and litigation
- Represent clients in audits, administrative appeals and litigation of state and local tax matters in nearly every state, as well as in the District of Columbia
- Represent clients in multistate tax controversies, where the same issue arises in multiple jurisdictions
- Challenge assessments of income taxes, sales and use taxes, franchise taxes, property taxes, gross receipts taxes, excise taxes, payroll taxes, the Ohio Commercial Activity Tax and the Texas and Michigan business taxes
- Manage audits conducted by the Multistate Tax Commission (MTC)
- Policy and legislation
- Provide customized legislative and regulatory monitoring
- Analyze pending legislation and regulatory actions
- Develop response strategies, including drafting suggested statutory provisions, testifying on behalf of clients, preparing clients’ representatives for testimony, and developing special briefing programs and presentations
- Represent numerous Fortune 500 companies in developing and executing state tax policy advocacy plans, including efforts to pass federal legislation impacting state tax policy
We view our clients as partners, and we are committed to their long-term success. We constantly assess our clients’ state and local tax strategies while keeping the big picture in mind—looking at both the immediate needs and long-term goals of our clients, ensuring that every activity is in their best interest. Our clients have validated our approach, and many engage us as their national state and local tax counsel.
Sutherland wins $50 million tax refund from Oregon in intangibles case.
Sutherland won a $50 million tax refund plus costs for a Fortune 50 media company in the Oregon Tax Court, defeating the state's attempt to impose a tax on our client's intangible property.
Sutherland SALT team successfully appeals Microsoft’s characterization of software sales for income tax purposes.
Sutherland’s SALT team represented Microsoft Corporation before the California Court of Appeal in a matter related to Microsoft’s characterization of its software sales for income tax purposes in California. The Court of Appeal reversed the trial court’s decision and upheld Microsoft’s use of costs-of-performance sourcing.
Sutherland wins constitutional challenge of “excise tax,” which federal court affirms on appeal.
Our attorneys successfully challenged the constitutionality of an “excise tax” on greenhouse gas emissions enacted by Montgomery County, Md., which specifically targeted one of the country’s largest wholesale producers of electricity. The U.S. Court of Appeals for the Fourth Circuit agreed, and our client was refunded more than $10 million.
Articles Authored by Lawyers at this office:
Impact of International Tax Reform Proposals on U.S. Insurance Companies
Dennis L. Allen,Thomas A. Gick,Jerome B. Libin,Jeffrey H. Mace,Michael R. Miles, November 27, 2013
On November 19, retiring Senate Finance Committee Chairman Max Baucus (D-Mont.) released a “Discussion Draft” setting forth his international tax reform proposals. Of note, the Discussion Draft includes several proposals that target the international operations of U.S. insurance...
No Longer at Sea: IRS Finalizes Safe Harbor Reduction Regulations
, November 25, 2013
On November 14, 2013, the Internal Revenue Service (IRS) issued final regulations that permit employers to suspend or reduce safe harbor nonelective contributions under a 401(k), 401(m), or 403(b) plan during the plan year. The final regulations also revise the requirements that apply to mid-year...
IRS Issues Final Regulations Regarding Transfers of Derivative Contracts
Robert S. Chase,Daniel R.B. Nicholas,Amish M. Shah,Rich Sun, November 15, 2013
On November 5, 2013, the Internal Revenue Service (IRS) issued final regulations relating to the transfer or assignment of certain derivative contracts. The final regulations, which are provided as Treas. Reg. § 1.1001-4, address:
IRS Modifies “Use-It-Or-Lose-It” Rule for Health FSAs
, November 08, 2013
In Notice 2013-71 (Notice), the Internal Revenue Service (IRS) relaxed its longstanding “use-it-or-lose-it” rule for health flexible spending accounts (Health FSAs). Employees may now be permitted to carry over up to $500 of their unused Health FSA balances to the following plan year to...
IRS Issues Draft FATCA FFI Agreement and Announces Positive New Rules for Insurance Companies
Dennis L. Allen,Jeffrey H. Mace,Michael R. Miles,M. Kristan Rizzolo,Carol P. Tello, November 04, 2013
On October 29, the Internal Revenue Service (IRS) issued Notice 2013-69, which includes guidance to foreign financial institutions (FFIs) entering into FFI agreements with the IRS and a draft FFI agreement. The Notice also describes some of the changes the IRS intends to make to the recently...
Illinois Click-Through Nexus Law Preempted by the Internet Tax Freedom Act
, October 25, 2013
In a 6-1 decision, the Illinois Supreme Court affirmed an Illinois Circuit Court holding that Illinois Public Act 96-1544 (The Click-Through Nexus Act), requiring out-of-state retailers to collect and remit use tax, violates the Internet Tax Freedom Act (ITFA). Performance Marketing Ass’n v....
OECD Summarizes Transfer Pricing Documentation Questions Ahead of November Consultation
Robert S. Chase,Mikka Gee Conway,Jennifer B. Molnar,Carol P. Tello,H. Karl Zeswitz, October 11, 2013
The Organisation for Economic Co-operation and Development (OECD) has issued a memorandum in connection with the planned overhaul of transfer pricing documentation rules under its action plan to address base erosion and profit-shifting. The memorandum follows the OECD’s July 30 “White...
IRS Updates Renewable Energy Tax Credit Beginning of Construction Guidance
, September 26, 2013
On September 20, 2013, the Internal Revenue Service (IRS) issued Notice 2013-60, which provides additional guidance that will help developers and purchasers of renewable energy facilities meet the beginning of construction requirement for the renewable energy section 45 production tax credit (PTC)...
BATSA Up: Congress Once Again Considers Nexus Legislation
Andrew D. Appleby,Zachary T. Atkins,Madison J. Barnett,Marlys A. Bergstrom,Jonathan A. Feldman, April 27, 2011
Would Thomas Jefferson approve of Congress imposing its will on state efforts to collect income tax from out-of-state companies? That was the question posed by Rep. Steve Cohen (D-TN) to two sponsors of the Business Activity Tax Simplification Act of 2011 (BATSA) (H.R. 1439) who both happen to be...
ACLU Sues North Carolina Over Its Sales/Use Tax Audit Practice
Michele Borens,Jeffrey A. Friedman,Stephen P. Kranz,Marc A. Simonetti,Eric S. Tresh, July 15, 2010
The aggressiveness of some states to assert tax jurisdiction over out-of-state retailers (or to enforce tax against their customers) took another turn last week. On June 23, 2010, the American Civil Liberties Union (ACLU) filed a complaint in U.S. Federal District Court against Kenneth Lay in his...