Smithfield, Apportionment, and the Limits of Single Sales Factor: A Discussion of California's Most-Watched SALT Cases

Smithfield, Apportionment, and the Limits of Single Sales Factor: A Discussion of California's Most-Watched SALT Cases

In the latest GeTtin' SALTy podcast episode, host Nikki Dobay welcomes new Greenberg Traurig colleague John Ormonde, a shareholder in the firm's State and Local Tax Practice. The centerpiece of the episode is a detailed inside look at the Smithfield Foods case, which John identifies as one of the most significant California apportionment decisions in recent memory - and which observers at the Federation of Tax Administrators have called perhaps the single most important case on apportionment for the foreseeable future. John breaks down the two distinct issues before the court. The first issue concerns whether Smithfield qualified as an agricultural business under California Revenue and Taxation Code Section 25128, entitling it to three-factor apportionment rather than single sales factor apportionment. The second - and more broadly applicable - issue involves alternative apportionment under Section 25137, California's codification of Section 18 of UDITPA, which has counterparts in more than twenty states. Nikki and John also preview two additional pending California matters. The NTU case, currently on appeal, challenges the retroactive application of Revenue and Taxation Code Section 25128.9, which modified the apportionment factors in ways that effectively eliminated the use of gross receipts as historically understood. The episode also touches on Garcia-Rojas v. Franchise Tax Board, in which the California Court of Appeal held that a sole proprietor performing services for a California customer was not engaged in a unitary business and therefore could not be subjected to market-based sourcing under the UDITPA-derived regulation - a decision now before the California Supreme Court on FTB's petition for review. The episode closes with a lightly competitive debate over World Cup allegiances, with both Nikki and John ultimately landing on Mexico.

Leading the MTC: A Conversation with New Executive Director Keith Richardson

This episode of GeTtin' SALTy features an introductory conversation with Keith Richardson, the newly appointed Executive Director of the Multistate Tax Commission (MTC). Host Nikki Dobay explores Keith's unconventional path to state and local tax administration, tracing his career from community banking and the North Philadelphia Financial Partnership through his tenure as Philadelphia Revenue Commissioner under Mayor Michael Nutter and later as head of the DC Office of Tax and Revenue. Their discussion covers Keith's vision for the MTC's future, including his focus on organizational excellence, talent development, expanded engagement with local taxing jurisdictions, and deeper outreach to the business and practitioner communities. The episode also touches on pressing SALT policy issues on the MTC's radar, including the taxation of digital goods, wealth taxes, and the emerging regulatory questions surrounding prediction markets. Throughout, Keith reflects on the MTC's 59-year mission to promote uniformity and consistency in state and local tax policy and administration, and what he hopes to accomplish as he carries the organization into its next chapter. Tune in!

California Court of Appeal Rejects FTB's Unitary Business Theory for Individuals in Garcia-Rojas: A Win for Non-Resident Sole Proprietors

In this episode of the GeTtin' SALTy podcast, host Nikki Dobay is joined by Greenberg Traurig colleagues Brad Marsh and Jennifer Vincent to discuss a significant recent victory in the California Court of Appeal - First Appellate District: Xavier Garcia-Rojas v. Franchise Tax Board. The case involved a Texas-based radiologist who performed all of his work from his home state yet faced California income tax assessments on his earnings from a contract with a California-based company. Brad and Jen walk through the factual background of the case, explain how the Franchise Tax Board attempted to apply the unitary business principle to a sole proprietor conducting a single business activity, and describe why the Court of Appeal rejected that theory. The episode includes a practical note for practitioners: non-resident individuals who have been assessed California tax under the Bindley framework may now have strong grounds to file refund claims in light of this decision. They wrap up the discussion with a lighthearted round of concert recommendations.

AB 1790: California's Push to Repeal the Water's Edge Election - Loophole or Sound Tax Policy?

In this episode of Greenberg Traurig's GeTtin' SALTy podcast, host Nikki Dobay is joined by Peter Blocker, Vice President of Policy at the California Taxpayers Association, and Alan Pasetsky, Owner and Founder of Tax Policy LLC, for an in-depth discussion of California Assembly Bill 1790 - a measure that, if passed, would repeal California's Water's Edge election for corporate income tax purposes. The conversation covers the fiscal and political backdrop driving the bill, including California's projected multi-billion dollar budget shortfall and pressure from the State Employee Union (SEIU) to identify new revenue sources. The guests discuss the characterization of the Water's Edge election as a "loophole," explaining its long-standing role in state tax policy, its use in the majority of states with combined reporting regimes, and the risks of double taxation and compliance burdens that worldwide combined reporting would create. They also examine the international dimension of the proposal, including a letter signed by eight foreign governments expressing concern about potential double taxation and the prospect of retaliatory trade measures against California businesses. Peter and Alan outline the opposition coalition being led by CalTax, the legislative path forward through the Assembly Appropriations Committee and the May 14th suspense hearing, the two-thirds vote requirement, and the possibility that the measure could be folded into the budget process. The episode closes with a look at the longer-term landscape, including the governor's stated opposition to tax increases and the implications for California's upcoming gubernatorial race.

Data Centers and the Sales Tax Misnomer

In this episode of the GeTtin' SALTy podcast, host Nikki Dobay is joined by Jared Walczak, Senior Fellow at the Tax Foundation and founder of the Walczak Policy Consulting Group, for a focused discussion on the evolving state and local tax treatment of data centers. Jared explains how many states initially structured their favorable treatment of data center equipment as targeted incentives rather than incorporating that treatment into their existing business input exemption structure (i.e., manufacturing/machinery and equipment exemptions). While the practical effect was largely the same at the time, this framing decision has created significant political and policy complications. As state revenues have normalized and public sentiment toward data centers has grown more mixed in some communities, those incentives have come under increasing scrutiny -- with lawmakers questioning why the state is "giving away" revenue, a framing that would not arise if the exemption had been built into the standard sales tax framework from the outset. Nikki and Jared discuss the core policy argument: that data center equipment is a classic business input, no different in principle from manufacturing machinery and equipment, and that subjecting it to sales tax runs counter to the foundational design of a consumption-based tax. They also address the economic stakes, including the capital-intensive nature of data center investment, the regular refresh cycles driven by AI and technological advancement, and the significant local tax revenues these facilities generate through real and personal property taxes. The episode closes with a look at the broader competitive landscape -- including the relevance of foreign VAT regimes -- and a reminder that the question for states is not whether data centers will be built, but where.