D.C. Ruling Presents Franchise Tax Opportunity
Based on a recent D.C. Court of Appeals ruling, taxpayers who are based outside D.C., but have a sufficient number of employees performing “qualifying high-technology” work at a fixed location in a high-technology zone for a sufficiently extended period of time may qualify for D.C.’s franchise tax exemption for qualified high-technology activities. In other words, even if the taxpayer does not maintain it’s own office or base of operations in D.C., it may still qualify for the exemption.
The D.C. Court of Appeals ruling involved a Virginia based corporation that provided information-technology products and services primarily to the federal government on the basis of large, long-term contracts.
The opportunity will be determined based on the facts and circumstances of each taxpayer.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.