State & Local Tax. State & Local Tax. pillsburylaw.com 1. Pillsbury Winthrop Shaw Pittman LLP pillsburylaw.com

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1 State & Local Tax State & Local Tax Pillsbury Winthrop Shaw Pittman LLP pillsburylaw.com pillsburylaw.com 1

2 Struggling to manage myriad state and local tax decisions across multiple jurisdictions? One law firm is all you need. 2 Pillsbury Winthrop Shaw Pittman LLP

3 State & Local Tax Pillsbury s State & Local Tax (SALT) team is your company s single source for advice and representation on any type of tax or fee in any jurisdiction in the United States. We are the state and local tax planning and litigation advisors to Fortune 50 companies, midcaps, startups and high-net-worth individuals. The breadth of our capabilities and geographic reach and our track record for securing the results our clients seek led the Chambers USA survey of in-house counsel to name us one of the country s smartest state and local tax teams. Distinguishing Experience Winning a First-of-a-Kind Lawsuit and Millions in Tax Relief. Represented Beneficial New Jersey, a subsidiary of HSBC, in the New Jersey Tax Court in the lead case involving the state s interest add-back provisions. The court concluded in the first-ever challenge to New Jersey s interest add-back law that the taxpayer s interest expense deductions should be allowed under the unreasonable exception, garnering a $4.4 million refund and sparing our client millions in future taxes. Pushing Back on a Multimillion-Dollar Quadrupling of Property Taxes. When a St. Louis based provider of digital television, telephone and Internet services received an Inyo County, California, property tax assessment that was 400 percent higher than normal $17 million instead of $4 million company officials were stunned. Within three weeks, Pillsbury attorneys got up to speed on cable system valuations and negotiated a resolution that saved our client millions of dollars in taxes. Successfully Challenging a Local Tax Scheme. Represented Chevron versus the City of Richmond in which the city s business tax was held to be facially invalid under the Commerce Clause and the Internal Consistency Test, garnering a refund to our client of approximately $20 million in overpaid taxes. Achieving a Tax Relief Breakthrough for a Fortune Global 20 Client, ending an eight-year battle with the California Franchise Tax Board (FTB). Covering a range of cuttingedge unitary taxation, formulary apportionment, water s edge, combined reporting and constitutional issues, the case dates back to The FTB agreed in July 2007 to issue more than $143.5 million in refunds to our client and also agreed to reverse assessments of tax, interest and potential penalties of $276.4 million a swing of $420 million in our client s favor. pillsburylaw.com 3

4 Distinguishing Experience Resolving Complex Unitary Business and Apportionment Issues. For six years, Pillsbury represented one of the largest U.S. companies in administrative proceedings before California s Franchise Tax Board. The dispute involved complex unitary business and formulary apportionment issues from 1987 through The client engaged Pillsbury to challenge a controversial tax penalty California enacted in 2004, targeting taxpayers that failed to participate in the state s tax amnesty program. In 2007, FTB agreed not only to abate $500 million in tax assessments, interest and potential penalties against our client, but also issued refunds or credits of nearly $65 million. Reopening Real Property Value for a Telecom Giant. Our team represented a telecommunications client in a long-standing battle involving the client s right to expand its property tax appeal. Under California law, it was unclear whether such appeal rights were limited to the personal property or whether a tenant could also reopen the value of the real property by including such property in the appeal. The California Court of Appeal ruled in favor of our client, entitling it to reopen the value of all real property at its audited locations. Reversing Trial Court Rulings for a Major Health Care Company. Pillsbury obtained a total reversal of a prior unfavorable trial court ruling for Cardinal Health 301 Inc. in California s Fourth District Court of Appeal. In siding with Cardinal Health, a manufacturer and distributor of medical and surgical supplies and technologies, the court ruled that application computer software is not subject to property taxation even when it is bundled, or prepackaged, with computer hardware. At issue was the software contained in Cardinal s MedStations, stand-up medicine storage cabinets with built-in computers that the company leases to hospitals. Garnering $100 Million in Tax Refunds for a Client Pillsbury successfully negotiated a $100 million refund for a major bank following years disputing whether gross receipts of its broker-dealer subsidiary operating outside California should be included when determining the bank s state tax liability. Generally, California applies an apportionment formula that considers the unitary group s worldwide income and decides what portion was earned in state. California s Franchise Tax Board believed that including the subsidiary s outof-state income would result in understatement of income attributable to our client s in-state business activity. Convincing the Board otherwise, we won this groundbreaking refund. 4 Pillsbury Winthrop Shaw Pittman LLP

5 State & Local Tax Managing High-Net-Worth Individuals Income Tax Liability Pillsbury s SALT team led a five-year effort before California s FTB, disputing a $37 million tax assessment against our client who had moved from California to Florida and sold stock in his co-founded company, generating around $400 million. This attracted FTB s attention, leading to an audit and tax liability assessment. Instead of pursuing direct appeal to the State Board of Equalization, we convinced FTB s chief counsel to have senior counsel review the assessment, resulting in a settlement at just 10 percent of the original tax bill. Won Complete Abatement of $10 Million Tax Assessment for High-Net-Worth Client Representing a high-net-worth individual in a major California personal income tax case before California s State Board of Equalization, Pillsbury s SALT attorneys obtained complete abatement for our client of a proposed tax assessment of approximately $10 million. The case involved contentious residency and sourcing issues related to the taxpayer s withdrawal from a California partnership and move from California to Washington. After a nearly six-year struggle, we succeeded in convincing the SBE of the merits of our client s position on both issues. Saving Multinational Corporate Clients $80 Million in Tax Liability and Interest The SALT team represented two multinational corporations in a long-running California corporate income tax dispute before the FTB involving a series of complex unitary business, business/ nonbusiness income, application of the apportionment formula, a water s edge combined report, and interest expense add-back and dividend issues. We built the case, filed protests before the FTB and won a favorable ruling on nearly all major issues, which will result in approximately $80 million of tax and interest savings when the ruling is finalized. Securing $50 Million in Tax Refunds for an Industry Giant The SALT team lawyers successfully resolved a corporate unitary tax assessment dispute in California for a 162 year-old California-based company with operations in 50 states that had been through two leveraged buyouts in 17 years. The issue was whether a company should be able to deduct 100 percent of its leveraged buyout transaction interest expenses. The company argued that since the buyout (and related borrowing) occurred outside its regular course of business operations, interest expenses should be solely allocated to California, not apportioned among states where it did business. Pillsbury successfully negotiated an FTB resolution on the eve of an SBE hearing, obtaining a $50 million refund for the client. pillsburylaw.com 5

6 The Pillsbury Difference Broad-based capabilities. Our team includes tax attorneys who have worked with the California Department of Justice Tax Division, California Franchise Tax Board and California State Board of Equalization, as well as with multinational corporations as in-house state tax counsel. This enables us to provide a unique perspective to our clients. Further, our vast experience in complex constitutional and factual issues enables us to handle any tax matter and deliver significant cost savings and efficiencies to our clients. Geographic reach. Our collective experience covers virtually every type of tax or fee confronted by our clients in states, counties and cities throughout the United States. We begin each matter already up to speed on the relevant tax law adding to the efficiencies and value we deliver to our clients. Effective and efficient tax controversy capabilities. Our team handles all of our administrative and judicial state tax litigation entirely within the group. This enables us to achieve outstanding results while at the same time providing greater efficiencies and cost savings to our clients. A veteran team that remains involved at every step. Our most experienced attorneys personally handle your case and are involved and accessible at every step. That is just one of the reasons for our long-standing relationships with our clients, our excellent reputation and why much of our business is based on client referrals. Solid credentials. The team has a sterling reputation, reflecting our extensive experience with the wide range of taxes and fees imposed by state and local taxing jurisdictions throughout the United States. We routinely achieve substantial savings for clients on corporate franchise and income taxes, sales and use taxes, real and personal property taxes, gross receipts taxes, documentary and other transfer taxes and personal income taxes. A soup-to-nuts firm with deep bench strength; the lawyers are always clear and incredibly efficient. One of the country s smartest state and local tax teams. Reflecting the breadth of our tax capabilities for any company doing business in the U.S., Chambers, Best Lawyer and PLC Which Lawyer? named us a top firm for federal, state and local tax matters. Extremely smart and creative ; super-responsive....very intelligent and able to elucidate the argument in an articulate, simple manner that makes sense. They have excellent timeliness in responding, expertise in the subject matter, relevance to the subject matter, and a professional approach. We have found Pillsbury s client service to be very good. They provide good value and good resources and we have made the decision again and again that they are our firm of choice. Source: Chambers USA 6 Pillsbury Winthrop Shaw Pittman LLP

7 State & Local Tax Representative State & Local Tax Clients Our clients include many of the largest multinationals in the Fortune 50, middle-market companies, new business ventures and individuals. We represent companies in virtually all industries, including energy, manufacturing, financial services, pharmaceutical, technology, real estate, transportation, retail, newspapers and publishing. Amazon Apple Chevron Corporation DIRECTV General Electric HSBC Levi Strauss McKesson Pfizer Union Bank Valero Energy Walt Disney Company About Pillsbury Pillsbury Winthrop Shaw Pittman LLP is an international law firm with offices around the world, and a particular focus on the technology, energy & natural resources, financial services, real estate & construction, and travel & hospitality sectors. Recognized by legal research firm BTI as one of the top 20 firms for client service, Pillsbury and its lawyers are highly regarded for their forward-thinking approach, their enthusiasm for collaborating across disciplines and their unsurpassed commercial awareness. From end-of-matter satisfaction debriefs to alternative fee arrangements, client service lies at the heart of our approach to law. This focus shows in the BTI Client Relationship Scorecard 2014, which surveyed more than 500 corporate counsel of Fortune 1000 companies, Pillsbury ranks in the top 10 percent of law firms with the best client relationships. Offices Abu Dhabi Austin Beijing Dubai Hong Kong Houston London Los Angeles Miami Nashville New York Northern Virginia Palm Beach Sacramento San Diego San Diego North County San Francisco Shanghai Silicon Valley Tokyo Washington, DC Learn More For more information about our state and local tax capabilities, please visit us at pillsburylaw.com/salt or contact: Jeffrey M. Vesely jeffrey.vesely@pillsburylaw.com pillsburylaw.com 7

8 ATTORNEY ADVERTISING. Results depend on a number of factors unique to each matter. Prior results do not guarantee a similar outcome. Pillsbury Winthrop Shaw Pittman LLP 1540 Broadway New York, NY pillsburylaw.com 2018 Pillsbury Winthrop Shaw Pittman LLP. All rights reserved. 8 Pillsbury Winthrop Shaw Pittman LLP