Eric D. Carstens
Subscribe to Eric D. Carstens's PostsEric D. Carstens focuses his practice on state and local tax matters, assisting clients with state tax controversy, compliance and multistate planning across all states for a variety of tax types and unclaimed property. Eric engages in all forms of taxpayer advocacy, including litigation, legislative monitoring and audit defense. He works closely with several of the Firm's taxpayer coalitions focused on specific state tax policy issues such as the taxation of digital goods and services and unclaimed property. Read Eric D. Carstens' full bio.
New Market-Based Sourcing in DC: Major Compliance Date Problem Fixed… For Now
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Feb 5, 2015
Posted In Allocation/Apportionment, District of Columbia, Income Tax, Massachusetts, Tax Base, UDITPA
The Problem On September 23, 2014, the District of Columbia Council enacted market-based sourcing provisions for sales of intangibles and services as part of the 2015 Budget Support Act (BSA), as we previously discussed in more detail here. Most notably the BSA adopts a single sales factor formula for the DC franchise tax, which is...
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Rate Reduction for D.C. QHTC Capital Gains to Begin… in 2019
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Jan 23, 2015
Posted In Allocation/Apportionment, District of Columbia, Sales Tax
Investors keeping a close eye on pending legislation (the Promoting Economic Growth and Job Creation Through Technology Act of 2014, Bill 20-0945) promoting investments in D.C. Qualified High Technology Companies (QHTC) will be happy to know it passed—but not without a serious caveat. While the bill was originally set to allow investors to cash in...
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Three Strikes…Tax on Cloud Computing Out in Michigan?
By McDermott Will & Emery, Eric D. Carstens and Stephen P. Kranz on Dec 3, 2014
Posted In Michigan, Sales Tax, Transaction Taxes
If the Department of Treasury (Treasury) was hoping that the Michigan courts would simply overlook the previous two cloud computing losses this year in Thomson Reuters (previously covered here) and Auto-Owners (discussed here), they appear to have been mistaken. Last Wednesday’s Court of Claims opinion in Rehmann Robson & Co. v. Department of Treasury marked...
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Beleaguered D.C. Taxpayers Achieve Another Success in Ongoing Challenges to the Methodology Used in the District’s Transfer Pricing Audit Program
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Nov 20, 2014
Posted In District of Columbia, Income Tax, Nationwide Importance, Procedure, Transfer Pricing
On Friday, November 14, 2014, an administrative law judge (ALJ) issued three identical orders granting the taxpayer’s motion for summary judgment in Hess v. OTR, Shell v. OTR and ExxonMobil v. OTR. In these orders, the ALJ determined that based on an early ruling that the challenged methodology was fatally flawed, the Office of Tax and...
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A Very Scary Time of the Year: MTC Joint Audit Selection
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Oct 23, 2014
Posted In Alabama, District of Columbia, Hawaii, Income Tax, Kentucky, Nationwide Importance, New Jersey, Transfer Pricing
With both Halloween and the Multistate Tax Commission (MTC) Income Tax Audit selection nearing, taxpayers should prepare themselves for the possibility of being spooked in the near future. On Thursday, October 30, from 2-4 pm EST, the MTC Audit Committee—including representatives from the 22 states participating in the upcoming round of joint income tax audits—will...
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D.C. Bill Ostensibly Lowers Tax on Capital Gains from QHTC Investments… But How?
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Oct 9, 2014
Posted In Allocation/Apportionment, District of Columbia, Income Tax, Nationwide Importance, Tax Base
On September 23, District of Columbia Council Chairman Mendelson introduced the Promoting Economic Growth and Job Creation Through Technology Act of 2014 (Bill 20-0945 , hereinafter the “Act”) at the request of Mayor Vincent Gray. This marks the second time that the Council has considered the introduced language; it was originally included as part of the...
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Can Taxpayers Find an Advantage in Vodafone Nowhere Income Argument?
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Sep 29, 2014
Posted In Allocation/Apportionment, Tennessee, UDITPA
It is difficult, but not impossible (and quite satisfactory), to find a silver lining for taxpayers in the alternative apportionment opinion Vodafone Americas Holdings Inc. v. Roberts, M2013-00947-COA-R3CV, 2014 WL 2895900 (Tenn. Ct. App. June 23, 2014). In this much discussed case, the Tennessee Court of Appeals affirmed a variance from the statutory cost of...
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Illinois Enacts Legislation Imposing a Self-Procurement Tax While Also Narrowing the Industrial Insured Exception for Transacting Nonadmitted Insurance
By Eric D. Carstens and Mary Kay McCalla Martire on Sep 11, 2014
Posted In Illinois, Insurance Tax
Illinois will soon begin taxing self-procured insurance premiums for the first time, as required by Senate Bill 3324, now Public Act 98-0978 (the Act). The Act, which was signed into law by Governor Quinn on August 15, was quietly ushered through the General Assembly as a supposed technical amendment. The Act is anything but—it substantively...
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Missouri DOR Burden of Proof and Notice Requirements Remain Uncertain After Veto
By McDermott Will & Emery and Eric D. Carstens on Jul 10, 2014
Posted In Missouri, Procedure
The Missouri General Assembly passed several tax-related bills at the end of the legislative session in mid-May that would have altered the Department of Revenue’s (Department) burden of proof and changed its notice requirements. While none of these bills ultimately passed due to vetoes by Governor Jay Nixon, the General Assembly is scheduled to review...
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You Do the Math: Unclaimed Property Lawsuit Filed Against Kelmar
By Diann Smith, Eric D. Carstens and Stephen P. Kranz on Jun 9, 2014
Posted In Constitutional Issues, Delaware, Nationwide Importance, Unclaimed Property
Mark McQuillen, president of Kelmar Associates, LLC, was misinformed when he was quoted as saying “I’ve never been sued” on May 26—less than one week after suit was filed against Kelmar and three Delaware state officials in a Delaware Federal District Court. See 72 State Tax Notes 455 (May 26, 2014). While the timing of...
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