Diann Smith
Subscribe to Diann Smith's PostsDiann Smith focuses her practice on state and local taxation and unclaimed property advocacy. Diann advises clients at any stage of an issue, including planning, compliance, controversy, financial statement issues and legislative activity. Her goal is to find the most effective method to achieve a client's objective regardless of when or how an issue arises. Diann emphasizes the importance of defining a client's objective - whether it is finality of a frequently audited issue, quick resolution of a stand-alone tax liability, or avoiding competitive disadvantages in the application of a tax. The defined objective then governs the choice of the path to a solution. Read Diann Smith's full bio.
Settlement Reached in Temple-Inland; Delaware Internally Reviewing Unclaimed Property Audit Practices
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Aug 11, 2016
Posted In Audits, Constitutional Issues, Delaware, Nationwide Importance, Procedure, Unclaimed Property
The court case challenging Delaware’s unclaimed property audit methodologies has settled following an opinion brutalizing Delaware’s position. This settlement leaves the US District Court for the District of Delaware (District Court) holding as precedent, but the issue of what methods Delaware must jettison remains open. Last Friday, Temple-Inland and Delaware filed a joint motion to...
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Texas Comptroller’s Office Holds Roundtable on Proposed Regulation Targeting IT, Pharmaceutical Industries
By Diann Smith and Stephen P. Kranz on Aug 9, 2016
Posted In Audits, Income Tax, Texas, Transaction Taxes
On August 4, 2016, representatives of the Texas Comptroller of Public Accounts held a limited-invite roundtable to discuss the proposed amendments to 34 Tex. Admin. Code 3.584, relating to the reduced rate available under the Texas Franchise Tax for retailers and wholesalers. As previously reported, these proposed revisions were published in the Texas Register on...
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Breaking News: Federal Court Finds Delaware’s Unclaimed Property Enforcement “Shocks the Conscience”
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Jun 29, 2016
Posted In Audits, Constitutional Issues, Delaware, Nationwide Importance, Procedure, Unclaimed Property
On June 28, 2016, the much-anticipated memorandum opinion of the US District Court for the District of Delaware in Temple-Inland, Inc. v. Cook et al., No. 14-654-GMS was released on the parties’ cross-motions for summary judgment, finding Delaware’s extrapolation methodology and audit techniques collectively violate substantive due process. According to Judge Gregory M. Sleet, “[t]o put...
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Unclaimed Property Hunger Games: States Seek Supreme Court Review in ‘Official Check’ Dispute
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Jun 10, 2016
Posted In Alabama, Arizona, Arkansas, Audits, Colorado, Constitutional Issues, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nationwide Importance, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Procedure, South Carolina, Texas, Unclaimed Property, Utah, West Virginia
Background As detailed in our blog last month, MoneyGram Payment Systems, Inc. (MoneyGram) is stuck in between a rock and a hard place as states continue to duel with Delaware over the proper classification of (and priority rules applicable to) MoneyGram’s escheat liability for uncashed “official checks.” The dispute hinges on whether the official checks...
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Breaking News: Texas Comptroller Publishes Retroactive Rule Targeting IT, Pharmaceutical Retailers; Clock Running on Comment Period
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on May 20, 2016
Posted In Audits, Income Tax, Texas
On May 20, 2016, the Texas Comptroller of Public Accounts published proposed amendments to 34 Tex. Admin. Code 3.584 – relating to the reduced rate available under the Texas Franchise Tax for retailers and wholesalers – in the Texas Register. As previously reported, these proposed revisions have the potential to double the tax rate for...
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Unclaimed Property Litigation Update – Spring 2016
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on May 16, 2016
Posted In California, Delaware, Nationwide Importance, Pennsylvania, Unclaimed Property
Litigation over unclaimed property rules and obligations continues to accelerate. The first quarter of 2016 brought developments in several cases, including a much-watched contest over merchandise credits and a new battle between the states over which state gets the money. California Merchandise Credits Not Subject to Remittance as Unclaimed Property; Implicit Application of Derivative Rights...
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No Surprises in Ohio CAT Nexus Oral Argument
By Diann Smith and Stephen P. Kranz on May 4, 2016
Posted In Audits, Constitutional Issues, Nationwide Importance, Nexus, Ohio, Sales Tax, Transaction Taxes
Oral argument before the Ohio Supreme Court took place on May 3 in the three cases challenging Ohio’s Commercial Activity Tax (CAT) nexus standard. Crutchfield, Inc. v. Testa, Case No. 2015-0386; Mason Cos. Inc. v. Testa, Case No. 2015-0794; Newegg, Inc. v. Testa, Case No. 2015-0483. Ohio imposes its CAT on a business that has...
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Retailers, Such as IT and Pharmaceutical Vendors, Among Businesses Targeted by Texas Comptroller’s Proposed Rule Change
By Diann Smith and Stephen P. Kranz on Apr 19, 2016
Posted In Audits, Income Tax, Texas, Transaction Taxes
The Texas Comptroller of Public Accounts recently proposed amendments to 34 Tex. Admin. Code 3.584 relating to the reduced rate available under the Texas Franchise Tax for retailers and wholesalers. These proposed revisions, which appear to formalize elements of informal guidance issued in August of 2015, have the potential to substantially impact a great number...
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MTC Arm’s-Length Adjustment Service (Part II): “An Expression of Grief, Pity, or Concern”
By Diann Smith and Stephen P. Kranz on Apr 8, 2016
Posted In Audits, Income Tax, Nationwide Importance, Transfer Pricing
Executive Summary Multistate Tax Commission (MTC) transfer pricing program moving forward in some fashion; Priority includes information sharing among participating states (and possibly their third party vendors) on transfer pricing issues. Because a formal agreement was found necessary, the scope of the information shared is presumed to include taxpayer specific information; and States currently have...
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Viral Marketers Beware – In Alabama, Sales Tax Nexus Created for Out-of-State Bookseller Even Though In-State Teachers Not Acting on Behalf of Seller
By Diann Smith and Stephen P. Kranz on Mar 31, 2016
Posted In Alabama, Audits, Constitutional Issues, Nationwide Importance, Nexus, Sales Tax, Transaction Taxes
After a quarter of a century, the school book nexus cases continue to proliferate, delight and mystify. The latest installment in the saga is from Alabama. Scholastic Book Clubs, Inc. 2931 v. State Of Alabama Department Of Revenue, Ala. Tax Tribunal, Dkt. No. S. 14-374 (March 25, 2016). Like the other cases, the question addressed...
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