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On December 16, 2014, President Barack Obama signed the Consolidated and Further Continuing Appropriations Act, 2015, for sales and use tax purposes. The Act includes a provision that extends the Internet Tax Freedom Act (ITFA) until October 1, 2015 with all provisions unchanged.


On January 9, 2015, the House of Representative introduced a bill (un-numbered) that would permanently extend the ITFA, banning states and local jurisdictions from imposing any new tax on internet access. The proposed bill removes the current effective dates of November 1, 2003 through October 1, 2015 and changes the effective date to be effective for new taxes imposed after the date of the enactment.  It is not clear if states that have been grandfathered under the existing provision could retain their current tax on internet access but it appears that may be the case.  No formal legislation has been introduced that would incorporate the Marketplace Fairness Act into this bill. The bill is sponsored by House Judiciary Committee Chairman Bob Goodlatte, among others.


For our previous news item on this topic, see Internet Tax Freedom Act is Extended Through December 11, 2014.


For an update on this news item, see Internet Tax Freedom Act Extended Until December 11, 2015.


(Consolidated and Further Continuing Appropriations Act, 2015; H.R. 235)


A Louisiana retailer that did not have any locations in Texas established nexus in the state by delivering furniture in company trucks to Texas residents. As a result, the retailer was required to collect Texas use tax on items delivered into the state. A retailer is engaged in business in Texas if it has a representative, agent, salesperson, canvasser, or solicitor operating in the state for the purpose of selling, delivering or taking orders for a taxable item. Additionally, Texas tax law requires an out-of-state retailer who is engaged in business in Texas to continue collecting Texas use tax on sales made into the state for 12 months after the seller ceases to have nexus or ceases to be engaged in business in Texas.The retailer claimed it relied on advice from the Comptroller’s office but never submitted written proof of the advice.  Based on lack of evidence, the assessment was upheld.  (Decision, Hearing No. 107,751, Texas Comptroller of Public Accounts, July 23, 2014, released September 2014)


President Barack Obama has signed federal legislation extending the Internet Tax Freedom Act (ITFA) through December 11, 2014 as part of the joint resolution which made continuing appropriations for fiscal year 2015. The ITFA was previously set to expire on November 1, 2014. The ITFA bars state and local governments from imposing multiple or discriminatory taxes on electronic commerce and taxes on Internet access.


For an update to this news item, see Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced.


(P.L. 113-164 (H.J. Res. 124), 113th Congress, 2nd Session, Laws 2014)


A taxpayer that entered into operating leases for equipment located in Texas and then assigned its right to receive lease payments to third parties was properly assessed Texas sales tax because it failed to accelerate, collect, and report the sales taxes due on the remaining lease payments at the time it assigned the leases. The taxpayer requested an offset of its tax liability with the sales taxes that were remitted in error by its assignees. This was denied because the right to claim those taxes belonged to the lease assignees as tax was not due on their payments. In order to claim any credit for the assignees’ payments, the taxpayer would have to secure refund assignments from the assignees.(Decision, Hearing No. 105,312, Texas Comptroller of Public Accounts, June 10, 2013, released August 2013)


Representative Lamar Smith (Republican, Texas) has introduced a bill to bar multiple taxes on digital goods and services.  Smith had proposed an earlier bill which failed to pass.  This bill is a revised version of the earlier bill. The proposed bill – called the Digital Goods and Services Tax Fairness Act of 2013 – would only allow a state to tax sales of digital goods and services to customers with a tax address within that state. Additionally, states would be barred from imposing multiple taxes on digital goods. The bill defines digital goods as sounds, images, data and facts maintained in digital form. Internet access service is not included as a digital good in the bill. (H.R. 3724)



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