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Franchisors and IP Licensors Can Save State Income Taxes
On Oct. 23, the New Jersey tax court issued a decision that most tax experts expect will change the direction state income taxation has been taking for the past decade. The new direction will reopen an opportunity for franchisors and other licensors of intellectual property such as trademarks and patents to avoid paying state income taxes by using intellectual property holding companies based in tax-haven states such as Delaware and Nevada.
The case of Lanco Inc. v. Director, Division of Taxation holds that New Jersey may not impose its income tax on a corporation whose only contact with the state is that it receives license fees from a company using the licensed marks to conduct business in New Jersey. Lanco Inc. is the licensor of Lane Bryant retail outlets.
The relevant Lane Bryant facts are indistinguishable from those of Toys “R” Us, whose Delaware holding company was the basis for the South Carolina Supreme Court's decision in Geoffrey Inc. v. South Carolina Tax Commission. Both parent companies used Delaware holding companies to hold their trademarks and other intellectual property. Both Delaware companies licensed their IP to retail stores operating as separate corporations in other states. Both Delaware companies received royalties from the operating retail units, free of Delaware income tax under '1902(b)(8) of the Delaware Code. The operating retail units of both companies deducted the royalties they paid to their Delaware sister companies. The South Carolina and New Jersey departments of taxation both tried to assess their state income tax on the royalty income received by the Delaware holding companies.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?