State + Local Tax PRACTICE GROUP CHAIR Craig B. Fields 250 West 55 th Street New York, New York 10019 (212) 468-8193 cfields@mofo.com Morrison & Foerster is the first large law firm in the country to build a dedicated State + Local Tax ( SALT ) practice and the first to extend that practice to representing clients in states throughout the country, and that primacy continues. Our unique and long-standing knowledge, experience, and leadership are second to none for SALT legal, litigation, and appellate representation. Our Broad Reach and Depth of Experience. Morrison & Foerster s nationally recognized SALT attorneys focus on litigation, planning, and consulting for clients on a variety of tax issues, including corporate franchise and income, sales and use, personal income, real and personal property, local business license, gross receipts, transfer, severance, and other areas, including unclaimed property. OUR SALT GROUP Our SALT Group has more than 20 attorneys. 23 percent of our SALT attorneys are women. Our SALT attorneys are consistently rated among the best by Chambers USA, Legal 500, The Best Lawyers in America, and State Tax Notes. The firm regularly advises clients on the SALT implications of corporate transactions and reorganizations, including multistate analyses of mergers and acquisitions. We serve a broad range of industries, including automotive, banking, chemical, computer technology, consumer products, credit card and consumer finance, energy, financial, food, industrial manufacturing, pharmaceutical, retail, and telecommunications. Our Nationwide Perspective. The SALT Group is on the short list of virtually every large United States company with a significant SALT controversy and is regularly consulted for transactional work. Our lawyers approach SALT issues from a nationwide perspective, taking into account the similarities and differences of SALT systems throughout the United States, and a state-specific perspective, taking into account unique aspects of SALT laws. Our Proven Track Record of Success. The SALT Group has successfully litigated across the country, and we have resolved the vast majority of our matters without the necessity of trial. We have handled complex state and local tax matters in almost every state. We have been and are 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. Our U.S. Supreme Court Work. 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. State + Local Tax Practice 1
At Morrison & Foerster, attorneys in the State + Local Tax Group have resolved the vast majority of client s matters without the necessity of trial. SALT Practice Differentiators. What separates us from the competition? It s simple. We ve been doing it longer, have more litigation experience and published decisions, and have obtained a greater number of favorable settlements for our clients. The SALT Group has successfully litigated across the country, but we have resolved the vast majority of our matters without the necessity of trial. We have handled complex state and local tax matters in virtually every state. According to Chambers, MoFo has the top state and local tax practice in the country. Representative Matters In addition, the SALT Group continues its winning results for clients in State court proceedings, including: Lorillard Licensing Company, LLC For this affiliate of Lorillard Tobacco Company, the New Jersey Tax Court ruled that New Jersey may not apply dual nexus standards for Throwout purposes. The court held that because New Jersey successfully asserted an economic nexus standard for Constitutional subjectivity purposes, when applying Throwout to increase the portion of income that is taxed in New Jersey, that same economic nexus standard must also apply for other states subjectivity. MoFo has the top state and local tax practice in the country. The lawyers know their subject matter and always get my company great results. 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. 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. State + Local Tax Practice 2
The firm received an A+ rating in state taxes from Legal 500, which called Morrison & Foerster's SALT practice "exemplary on all counts." 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. Whirlpool Properties, Inc. The New Jersey Supreme Court significantly narrowed the Throwout statute to survive a facial constitutionality challenge and held that, to operate constitutionally, Throwout could only be applied to untaxed receipts due to a lack of jurisdiction to tax arising from an insufficient connection with the corporation or from congressional prohibition, such as P.L. 86-272. 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. The Virginia Supreme Court refused the Department of Taxation s petition for appeal. Home Depot U.S.A., Inc. The California State Board of Equalization ruled in favor of Home Depot in the first corporate income tax appeal challenging the FTB s position that treasury gross receipts from marketable securities are excluded from the sales factor. Lorillard Tobacco Company The Michigan Court of Appeals ruled that Lorillard Tobacco Company was permitted to elect to use the three-factor apportionment formula under the Multistate Tax Compact and reversed the Court of Claims. Duke Energy Corporation The New Jersey Tax Court ruled for the company and concluded that electric utilities taxes paid by Duke Energy Corporation to North Carolina and South Carolina are not taxes on or measured by profits or income, or business presence or business activity and are not, therefore, required to be added back to the taxpayer s federal taxable income for CBT purposes. Astoria Financial Corporation & Affiliates The New York City Chief Administrative Law Judge held that Astoria Bank was not required to include in its combined New York City bank tax returns its Connecticut subsidiary that held non New York mortgage loans. State + Local Tax Practice 3
Awards + Rankings Awards + Rankings Our lawyers are consistently rated among the best in the United States and throughout the world. Many of our lawyers have been recognized by publications like Chambers USA, Legal 500, The Best Lawyers in America, and State Tax Notes, and honored by organizations including the Council on State Taxation. Chambers USA 2014 California: Tax Nationwide: Tax Controversy New York: Tax They bring a superior degree of flexibility and efficiency. -Chambers USA 2014 One of the best national firms in the area of state income taxation. -Legal 500 US 2013 Legal 500 US 2014 Domestic Tax: East Coast Domestic Tax: West Coast Nationwide: Tax Controversy U.S. News Best Lawyers Best Law Firms 2014 National: Litigation Tax (Tier 1) National: Tax Law (Tier 1) New York: Litigation Tax (Tier 1) New York: Tax Law (Tier 1) Sacramento: Litigation Tax (Tier 1) San Francisco: Litigation Tax (Tier 1) San Francisco: Tax Law (Tier 1) Washington, D.C: Litigation Tax Washington, D.C: Tax Law (Tier 1) Law360 2013 Tax Practice Group of the Year Provides top-notch services with outstanding responsiveness to our needs. -U.S. News Best Lawyers Best Law Firms 2013 Other firms are highly adept at handling federal tax issues, while others excel in the state and local tax realm. But Morrison & Foerster is special among law firms because it excels in all of those areas. -Law360 Awards + Rankings 4
Attorney Summaries Craig B. Fields Partner New York (212) 468-8193 cfields@mofo.com Craig B. Fields is co-chair of the firm s Tax Department and is also chair of the firm s State + Local Tax Group. His practice focuses on litigation and planning relating to SALT matters. He has been involved in controversies regarding SALT issues before the administrative and judicial systems of jurisdictions throughout the United States as well as having resolved hundreds of non-public record cases around the country. Mr. Fields has also provided advice regarding the potential tax consequences of complex restructurings involving the corporation income (franchise) taxes, the sales and use taxes, and miscellaneous taxes of many jurisdictions. Chambers USA has ranked Mr. Fields as a leading state tax lawyer in 2012, 2013, and 2014. In addition, Legal 500 US has recommended him since 2011 and he has been ranked consistently in Super Lawyers since 2006. He was also named to State Tax Notes Top 10 Tax Lawyers list in 2011. Mr. Fields is a member of the Georgetown Law Center Advisory Board, the Advisory Board for The Journal of State Taxation, and the Bloomberg BNA State Tax Advisory Board. Mitchell A. Newmark Partner New York (212) 468-8103 mnewmark@mofo.com Mitchell A. Newmark's practice is concentrated on SALT litigation and appeals before administrative tribunals and judicial courts around the country. He also routinely advises companies and individuals with respect to sophisticated transactional matters including acquisition, restructuring, planning, and asset-based financing transactions regarding all state and local taxes. Mr. Newmark has written extensively in the area of state and local taxation and is a frequent lecturer concerning state and local taxes. He has been recognized by Legal 500 in the categories of Tax Controversy and Domestic Tax: East Coast. Mr. Newmark is admitted to practice before the U.S. Supreme Court; the U.S. Tax Court; the U.S. Court of Appeals, Third Circuit; and the U.S. District Court, District of New Jersey. Mr. Newmark has been a member of the New Jersey Supreme Court Committee on the Tax Court since 2008. He is the Immediate Past Chair of the Tax Section of the New Jersey Bar Association and remains a member of its Executive Committee and Executive Council. Attorney Summaries 5