U.S. State + Local Tax

Morrison & Foerster is a state + local tax law pioneer. Not only was it the first large law firm in the country to build a dedicated State + Local Tax (“SALT”) practice, but it was also first to extend that practice to representing clients in states throughout the country. There are only three annual national awards given for excellence in state and local tax practice: one by Tax Management, Inc.; one by the Council on State Taxation; and one by New York University. Two are named after our partners — the first for Frank Latcham and the second for Paul Frankel — and Paul Frankel was the first-ever recipient of the third.

MoFo’s SALT group is on the short list of virtually every large U.S. company with a significant SALT controversy and  is regularly consulted for transactional work. Our group successfully litigates across the country, but we resolve almost all of our matters without the necessity of trial. Our nationally recognized state and local tax lawyers focus on litigation, planning and consulting for clients on a variety of tax issues, including:

  • corporate franchise
  • income
  • sales and use
  • personal income
  • real and personal property
  • local business license
  • gross receipts
  • transfer
  • severance
  • unclaimed property

We regularly advise clients on the state and local tax implications of corporate transactions and reorganizations, including multistate analyses of mergers and acquisitions and  serve a broad range of industries including:

  • automotive
  • banking
  • chemical
  • computer technology
  • credit card
  • consumer finance
  • energy
  • food
  • industrial manufacturing
  • pharmaceutical
  • retail
  • telecommunications

Our lawyers approach state and local tax issues from a nationwide perspective, taking into account the similarities and differences of state and local tax systems throughout the United States, and a state-specific perspective, taking into account unique aspects of state and local tax law. We have been involved in many of the most important cases affecting state and local taxation, including a number that have been heard by the U.S. Supreme Court.

United States Supreme Court Matters

The SALT Group has been actively involved in many of the most important U.S. Supreme Court decisions shaping the field over the last 30 years, including the recent taxpayer win in MeadWestvaco Corporation v. Illinois Department of Revenue et al. In that case, the U.S. Supreme Court rejected Illinois’s attempt to tax the $1 billion plus gain realized by Mead Corporation from its sale of the electronic publisher LexisNexis (“Lexis”) on the theory that Lexis served an operational purpose in Mead’s business. The U.S. Supreme Court clarified that the “operational function” concept was not intended to add another basis for apportionment and that it merely recognizes that an asset may be unitary even if a payor and payee are not in a unitary relationship. However, when the asset is another business, as was the case with Lexis, the proper concepts to consider are functional integration, centralized management, and economies of scale.

Scioto Insurance Company
The Supreme Court of Oklahoma held that a company was not subject to Oklahoma’s corporate net income tax as a result of receiving payments under a licensing contract that was not made in the State of Oklahoma and no part of which was to be performed in Oklahoma.
EchoStar Satellite Corporation
The New York Court of Appeals ruled that when a satellite television provider purchases equipment that is subsequently leased to its customers for a separately stated fee on which it collected and remitted sales tax, that purchase is exempt from the State’s sales and use taxes.
United Parcel Service General Services Co.
The New Jersey Supreme Court affirmed the Superior Court, Appellate Division, decision that affirmed the Tax Court and held that the Director should have abated late payment penalties on a good faith issue and that the amnesty penalty did not apply to a good faith issue found on audit.
Meredith Corporation
The New York Appellate Division, Third Department, granted the corporation’s request for refund of corporate franchise taxes. The court held that regardless of its mode of delivery–by satellite or via tangible media–certain programming acquired for broadcast at the corporation’s television stations was tangible personal property for purposes of the property factor of the business allocation percentage.
Reynolds Metals Company
The Michigan Court of Appeals held that Reynolds Metals Company was not required to pay the Single Business Tax on a gain of more than $1 billion on the sale of its investment in an Australian joint venture.
AE Outfitters Retail Co.
The Indiana Tax Court granted partial summary judgment against the Department of Revenue in a forced combination case.
Wendy’s International, Inc.
The Circuit Court of the City of Richmond granted Wendy’s motion for summary judgment and held that Wendy's is entitled to a refund of Virginia corporate income tax paid with respect to the addback of intangible expenses.
GMRI, Inc. (Red Lobster, Olive Garden)
The California State Board of Equalization ruled that the State could not impose sales tax on certain restaurant gratuity checks of parties of eight or more customers (called “large parties”).
E.I. DuPont de Nemours & Co.
The Michigan Court of Appeals affirmed the decision of the Court of Claims on summary judgment that the gain realized by E.I. DuPont on the sale of its interest in a partnership was not apportionable to Michigan, and that receipts from sales of foreign exchange contracts could be included in the denominator of its sales factor.
Clorox Products Manufacturing Company
The New Jersey Tax Court and the Appellate Division held that when New Jersey states that it will follow the federal tax-free treatment of a contribution to capital in exchange for stock, New Jersey must also follow the federal basis rules.
Sherwin-Williams Co.
The Supreme Judicial Court of Massachusetts held that companies may legally reorganize themselves and, as long as the reorganization has economic substance, it must be respected for tax purposes even if the new structure also provides tax benefits.
The Hair Club For Men
The New York State Division of Tax Appeals held that its “Bio-Matrix” process did not constitute the sale of tangible personal property and, therefore cannot be taxed.
Northeast Homeland Security Regional Advisory Council (NERAC)
The New York State Division of Tax Appeals rejected New York State’s attempt to expand the definition of taxable “information services” to what are essentially consulting services.
Science Applications International Corporation (SAIC)
The Court of Appeals of Maryland ruled in favor of SAIC regarding a taxpayer’s right to receive interest on corporate tax refunds.
The New Jersey Tax Court rejected the Division of Taxation’s attempt to deprive the taxpayer of nearly four years of interest. The court held that as N.J.S.A. 54:49-14a barred taxpayers from filing refund claims once an assessment has been challenged and, but for the Throw-Out issue, the corporation was otherwise due a refund, the refund interest runs from the date the protest was filed and not the date of the final determination.

Chambers USA 2019
Nationwide: Tax Controversy
New York: Tax

U.S. News Best Lawyers® Best Law Firms 2018
Nationwide: Tax Law (Tier 1)
New York: Tax Law (Tier 1)
San Francisco: Tax Law (Tier 1)
Washington, D.C.: Tax Law (Tier 1)

Chambers USA 2017
California: Tax
Nationwide: Tax Controversy
New York: Tax

Legal 500 US 2019
U.S. Taxes: Contentious
U.S. Taxes: Non-Contentious

U.S. News Best Lawyers® Best Law Firms 2016
Law Firm of the Year: Litigation - Tax

Chambers USA 2016
California: Tax
Nationwide: Tax Controversy
New York: Tax

Legal 500 US 2016
U.S. Taxes: Contentious
U.S. Taxes: Non-Contentious

Chambers USA 2015
California: Tax
Nationwide: Tax Controversy
New York: Tax

Legal 500 US 2015
Domestic Tax
Nationwide: Tax Controversy

Here is what they say about us:

"Esteemed for its high-level state and local tax expertise. Acts on both contentious and advisory issues for household-name clients.”
(Chambers USA 2018)

“They are always available and responsive to our needs and requests, and provide outstanding analytics behind the issues and very good solutions.”
(Chambers USA 2017)

"Very good handling, I view them as the top state and local tax firm in the USA."
(Chambers USA 2016)

"They had the expertise I needed and I received excellent client service."
(Chambers USA 2016)

“Very high comfort level on the big-dollar, high-risk issues.”
(Legal 500 US 2016)

“Put their clients first and are always available when needed.”
(Legal 500 US 2016)

“I find them to be very timely, accurate and knowledgeable about industry practices.”
(Chambers USA 2015)

“They do a terrific job, they’re very informed and realistic.”
(Chambers USA 2015)

“They bring a superior degree of flexibility and efficiency.”
(Chambers USA 2014)

“Excellent technical knowledge and experience with handling state tax cases and issues. They are always very timely to respond." (Chambers USA 2019)

“Esteemed for its high-level state and local tax expertise. Acts on both contentious and advisory issues for household-name clients.”
(Chambers USA 2018)

“They are always available and responsive to our needs and requests, and provide outstanding analytics behind the issues and very good solutions.”
(Chambers USA 2017)

“Very good handling, I view them as the top state and local tax firm in the USA.”
(Chambers USA 2016)

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