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Kansas has issued a private letter ruling discussing the sales and use tax treatment of transactions involving a mobile point-of-sale device. The taxpayer’s device was used for order placement, order add-ons, checkout/payment, customer satisfaction as well as to grant customers access to premium content, such as news, videos, sports, educational items and games, for a fee which is to be paid on their bill. The Kansas Department of Revenue found that the device was a coin-operated device for sales and use tax purposes. As a result, sales tax was due on the gross receipts from its operation pursuant to Kansas tax code, which requires that tax be paid upon the gross receipts from the operation of any coin-operated device dispensing or providing tangible personal property, amusement or other services except laundry services, whether automatic or manually operated. The department also found that the device was included in the definition of "coin operated device" under Kansas sales tax regulations since it provides “amusement and diversion” to customers in the form of news, videos, sports, educational items and games. The department also stated that there are no specified requirements on whether you pay before, during, or after to gain access to this content in order for it to be classified as a “coin-operated device.”(Private Letter Ruling No. P-2015-004, Kansas Department of Revenue, November 3, 2015)

(05/11/2016)

On February 11, 2016, the U.S. Senate approved a permanent extension of the Internet Tax Freedom Act (ITFA) that is included in H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015. The bill also establishes an end date of June 30, 2020 for the seven states that currently impose a tax on internet access: Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas, and Wisconsin. President Obama is expected to sign the permanent extension of the ITFA into law. The House of Representatives had previously passed H.R. 235, the Permanent Internet Tax Freedom Act, on December 15, 2015.  For our previous news item on this topic, visit Internet Tax Freedom Act Extended Through October 1, 2016.

 

UPDATE: On February 24, 2016, President Barack Obama signed into law the permanent extension of the Internet Tax Freedom Act.

 

(Trade Facilitation and Trade Enforcement Act of 2015)

(02/23/2016)

On December 18, 2015, President Barack Obama signed H.R. 2029 – Consolidated Appropriations Act, 2016. The Act extends the Internet Tax Freedom Act (ITFA) through October 1, 2016. Prior provisions that grandfather taxes that existed prior to October 1, 1998 are also extended through October 1, 2016. For our previous news item on this topic, see Internet Tax Freedom Act Extended Until December 11, 2015. (H.R. 2029 – Consolidated Appropriations Act, 2016)

(01/18/2016)

An interface system was not subject to Kansas sales and use tax because it offered database access service. The interface system provided database access to medical records and test results of patients online. Kansas does not tax an information service or database access service that consists of a collection of records or data stored in a remote computer system and containing software that permits the purchaser of the service to access the system electronically to answer queries or extract desired information.(Private Letter Ruling No. P-2015-003, Kansas Department of Revenue, September 28, 2015)

(12/09/2015)

On September 30, 2015 the U.S. House of Representative passed H.R. 719, which includes a provision that would extend the Internet Tax Freedom Act (ITFA) through December 11, 2015. The ITFA was scheduled to expire on October 1, 2015. The bill will now go to President Obama for signature.

 

To see our previous news item on the ITFA, visit Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced.

 

To see an update on this news item, visit Internet Tax Freedom Act Extended Through October 1, 2016,

 

(H.R. 719)

(10/26/2015)

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