State and Local Tax (SALT) attorney Bruce Ely was quoted in Bloomberg BNA on a ruling from Judge Bill Thompson of the Alabama Tax Tribunal that would entitle an Alabama bank to deduct dividends received from a real estate investment trust in which the bank held majority ownership (Ameris Bank f.k.a. Southland Bank v. Ala. Dep't of Revenue). Ameris Bank inherited the dispute that stretches back to tax year 2002 through its acquisition of Southland Bank in Dothan, Alabama. The Alabama Department of Revenue assessed the bank for liabilities under the state's financial institutions excise tax on the grounds that it wrongly took deductions for REIT dividends.
“The ruling focuses on the use of captive REIT subsidiaries by financial institutions and the Department of Revenue's ongoing efforts to impose combined reporting without statutory authority,” said Ely, who served as co-counsel to the bank in this case. “Judge Thompson reminded the department that if it doesn't like a particular tax planning idea, clearly allowed by current law, they need to take the issue to the Legislature and seek their input.”
The complete article, “Alabama Banks Can Deduct Trust Dividends: Tax Tribunal,” appeared in Bloomberg BNA on February 20, 2017. (login required)