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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)


Effective January 1, 2015, any person or business that books hotel rooms in Wyoming utilizing the "merchant model" must be licensed as a vendor with the state and must collect and remit Wyoming sales and lodging taxes on the full sales price paid to them by customers for all room reservations sold. Under the "merchant model," a hotel offers its lodging services to the business at a discounted rate and the business sells those services to its customers at a higher rate. Due to a prior court decision, online travel companies (OTCs) and other business may no longer pay Wyoming taxes on the discounted rate that hotels offer to the OTCs. For our previous news item on this, visit Online Travel Companies Liable for Tax on Total Amount Paid by Customers in Wyoming. Upon applying for and receiving a Wyoming sales/use tax license, the business will purchase rooms from the hotel on a wholesale for resale basis without paying sales or lodging tax. The business will then collect sales and lodging taxes from their customers on the full retail sales price paid for the room reservations. To purchase on a wholesale for resale basis, the business must supply the hotel with a Streamlined Sales and Use Tax (SST) Agreement certificate of exemption.(Notice to Businesses Selling Hotel Accommodations in Wyoming Utilizing the "Merchant Model," Wyoming Department of Revenue, released October 20, 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)


The Streamlined Sales and Use Tax (SST) Governing Board has  issued a best practices matrix which provides answers to whether the state follows the best practices set forth in the SST Agreement regarding deal-of-the-day vouchers. All SST Member states are to complete and publish their position on the best practices.  The matrix outlines if the “best practiceas approved by the Streamlined Sales Tax Governing Board (SSTGB) for each of the products, procedures, services, or transactions identified in the chartis followed by the specific state. The following best practice descriptions are listed in the matrix along with whether the state follows the best practice:


1.       The member state administers the difference between the value of a voucher allowed by the seller and the amount the purchaser paid for the voucher as a discount that is not included in the sales price (i.e., same treatment as a seller’s in-store coupon), provided the seller is not reimbursed by a third party, in money or otherwise, for some or all of that difference.

2.       The member state provides that when the discount on a voucher will be fully reimbursed by a third party the seller is to use the face value of the voucher (i.e., same as the treatment of a manufacturer's coupon) and not the price paid by the purchaser as the measure (sales price) that is subject to tax.

3.       The member state provides that costs and expenses of the seller are not deductible from the sales price and are included in the measure (sales price) that is subject to tax. Further, reductions in the amount of consideration received by the seller from the third party that issued, marketed, or distributed the vouchers, such as advertising or marketing expenses, are costs or expenses of the seller.


Unless otherwise listed below, the SST member states have published the Best Practices Matrix and follow the three best practices listed above.


The following SST member states have issued the matrix but don’t follow some or all of the best practices listed above as of April 2014: Georgia, Kansas, Nebraska, New Jersey, and Ohio.


The following SST member states have not yet issued the matrix as of April 2014: Tennessee, Utah, Vermont, and Wyoming.  Copies of the matrix can be found on each specific state information page on the SST Web page at


The Wyoming Supreme Court has affirmed that several online travel companies (OTCs) were vendors and liable for collecting and remitting Wyoming sales and lodging taxes on the total amount paid to them by guests who used their services to book hotel rooms in Wyoming. The total amount subject to tax consists of the discounted room rate that the OTCs pay the hotel plus a service or facilitation mark-up fee that the OTCs charge to the customer. The OTCs argued unsuccessfully that the mark-up fee was not subject to tax. The court held that the mark-up was not exempt as a service or transaction fee but was part of the sales price. Guests could not obtain a hotel room through the OTCs without paying the charges. As a result, the charges were for "services necessary to complete the sale," which cannot be deducted from the sales price subject to tax. Even though they were not hotels, the OTCs were held to be vendors for tax purposes because they contracted with hotels to assign rooms and had the authority to rent those rooms at a price they established. The OTCs, not the hotels, controlled the financial aspects of the transaction. For example, customers seeking a refund or cancellation could do so only through the OTC, not the hotel. The court stated that the application of Wyoming sales tax to the OTCs did not violate the Dormant Commerce Clause, the Equal Protection Clause, or the Due Process provisions of the U.S. Constitution or the federal Internet Tax Freedom Act. (Travelocity.Com LP, et al. v. Wyoming Department of Revenue, Wyoming Supreme Court, No. S-13-0078, April 3, 2014)



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