![]() ![]() Maryland Court of Special Appeals parses activities through P.L. The taxpayer appealed this decision to the Maryland Court of Special Appeals. This decision was upheld by the Maryland Tax Court, where it was agreed that many of the activities had an independent business purpose. Specifically, activities such as attending pet-related events, encouraging in-store purchases, product training, education on selling points, performing quality control, reworking displays, and collecting competitive information, had alternative business purposes that went beyond solicitation. The Court found that Blue Buffalo’s in-state employees’ activities were not safeguarded because such activities had an independent business purpose beyond mere requests for orders. 86-272 prohibits states from imposing an income tax on foreign corporations when that corporation’s activities are limited to “mere solicitation of orders” for the sale of tangible personal property if approval and shipment of orders occurs outside the taxing state. The Tax Court considered whether the activities of Blue Buffalo’s Maryland employees indeed fell under the P.L. 2 The Maryland Comptroller denied the refund claims, and Blue Buffalo proceeded to file an appeal with the Maryland Tax Court. After further evaluation, Blue Buffalo later filed a refund claim for all taxes paid, based on its understanding that it was immune from income taxation due to the protection of P.L. ![]() Blue Buffalo employed several individuals in Maryland, including a distributor sales manager, one account manager, two regional demo managers and several dozen in-store sales representatives called “Pet Detectives.” Blue Buffalo’s employees engaged in various activities within Maryland including: (i) community and customer relations activities intended to build customer relationships and community goodwill (ii) product training activities designed to educate retailers and (iii) retail services, such as inventory management and competitive market research.įor the 20 tax years, Blue Buffalo originally filed Maryland corporate income tax returns and paid more than $700,000 in tax to the state. 86-272 somewhat more broadly than the Tax Court.ĭuring 20, Blue Buffalo Company, Ltd., a Delaware corporation headquartered and domiciled in Connecticut, sold premium pet products in Maryland. 1 While the Court of Special Appeals upheld the Maryland Tax Court’s original decision, the Court of Special Appeals interpreted the scope of P.L. 20, 2019, the Maryland Court of Special Appeals held that a foreign company’s activities in the state exceeded the protection of the solicitation of orders for tangible personal property under Public Law (P.L.) 86-272.
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