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.
Pennsylvania General Assembly Passes Revenue Package with Significant Digital Tax Expansion
By McDermott Will & Emery, Eric D. Carstens and Stephen P. Kranz on Jul 14, 2016
Posted In Audits, Pennsylvania, Sales Tax, Tax Base, Transaction Taxes
Yesterday, a legislative conference committee was appointed to approve an already agreed-upon $1.3 billion revenue package, which was immediately approved by both the House (116-75) and Senate (28-22) and sent to Governor Wolf for approval. The governor subsequently issued a press release confirming that he “will sign this revenue package.” A copy of the conference...
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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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Breaking News: Tennessee Submits Proposed Economic Nexus Regulation for Publication
By McDermott Will & Emery, Eric D. Carstens and Stephen P. Kranz on Jun 16, 2016
Posted In Constitutional Issues, Nationwide Importance, Nexus, Sales Tax, Tennessee, Transaction Taxes
Earlier today, the Tennessee Department of Revenue (DOR) submitted a new sales and use tax regulation for publication titled “Out-of-State Dealers” (Rule 1320-06-01-.129) that would administratively create an economic nexus threshold. With the submission, Tennessee becomes the most recent addition to the growing list of states seeking to directly attack the Quill physical presence standard. ...
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Washington ALJ Upholds B&O Assessment on German Company’s Royalty Income
By Arthur R. Rosen and Eric D. Carstens on Jun 16, 2016
Posted In Constitutional Issues, Nexus, Transaction Taxes, Washington
On May 31, 2016, the Washington Department of Revenue (DOR) Appeals Division released a Determination (No. 15-0251, 35 WTD 230) denying a German pharmaceutical company’s business and occupation tax (B&O) protest. The administrative law judge (ALJ) ruled that while the nondiscrimination provisions contained in Article 24 of the US-Germany Income tax Treaty (Treaty) “may apply,”...
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Alabama Issues Remote Sellers Use Tax Assessments, Newegg Inc. Appeals
By McDermott Will & Emery, Eric D. Carstens and Stephen P. Kranz on Jun 15, 2016
Posted In Alabama, Constitutional Issues, Nationwide Importance, Nexus, Sales Tax, South Dakota, Transaction Taxes
Ever since Alabama’s new economic nexus regulation went into effect, litigation over its constitutionality has been expected given that Alabama Commissioner Julie Magee and Governor Bentley said as much when announcing it (Rule 810-6-2-.90.03, effective January 1, 2016). It appears that they finally got their wish. On June 8, 2016, Newegg Inc. (Newegg) filed a...
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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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Alabama Appellate Court Finds Photos Merely Incidental to Nontaxable Photography Services
By McDermott Will & Emery, Eric D. Carstens and Stephen P. Kranz on May 6, 2016
Posted In Alabama, Audits, Nationwide Importance, Sales Tax, Tax Base, Transaction Taxes
Last Friday, the Alabama Court of Civil Appeals handed the Department of Revenue (Department) a significant loss in their continued attempt to tax non-enumerated services and tangible property provided in conjunction with those services under the sales tax. See State Dep’t of Revenue v. Omni Studio, LLC, No. 2140889 (Ala. Civ. App. Apr. 29, 2016)....
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Alabama Legislature Rejects (Yet Another) Attempted Digital Tax Expansion
By McDermott Will & Emery, Eric D. Carstens and Stephen P. Kranz on Mar 21, 2016
Posted In Alabama, Audits, Nationwide Importance, Sales Tax, Tax Base, Transaction Taxes
Last month, a much-anticipated bill drafted by the Alabama Department of Revenue (Department) was introduced in the Alabama Senate that would have expanded the definition of tangible personal property to include “digital goods.” See Senate Bill 242 (introduced February 16, 2016). Fortunately, the Senate Finance and Taxation Education Committee (Committee) rejected the bill on March...
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