Software/Hi-Tech

Sales Tax FAQs

Explore commonly asked questions about sales and use tax. A great starting place to learn about fundamental sales tax concepts and general applications to business.

Midwest State Tax Updates You May Have Missed

In sales tax, legislative updates and law changes are a constant. It is virtually impossible to keep up with all of the changes taking place in the states where you conduct business, especially if there are more than one. But…

The Internet of Things: What Is It and How Should It Be Taxed?

The Internet of Things can be summed up as a network of “intelligent,” connected devices that generate data for automating business processes and enabling new services.

Software Exemptions That You Might Not Think Of

In this blog post, we discuss three different types of software exemptions that may be available in some states.

Helpful Links

We’ve gathered some websites that may be helpful in finding answers to your sales tax questions or addressing your sales tax needs.

Sales of Digital Goods Taxable in District of Columbia

Effective January 1, 2019, sales of digital goods into the District of Columbia are subject to sales and use tax.

Use of Cloud Software Services via Hotel Internet Exempt in Indiana

Indiana has updated guidance regarding sales tax for hotels, motels and lodging establishments to reflect legislative changes regarding cloud computing.

Royalties Paid for Intellectual Property Exempt in Pennsylvania

Royalties paid for intellectual property used in operating video game machines in a casino resort were exempt from Pennsylvania sales and use tax.

Software as a Service Taxable in Rhode Island, Effective October 1, 2018

Effective October 1, 2018, Software as a Service (SaaS) is subject to Rhode Island sales and use tax.

Mobile Application Program and Bundled Services Subject to Texas Sales Tax

In a private letter ruling, the Texas Comptroller found a taxpayer’s mobile application program and bundled services taxable as data processing services.

Cloud-Based Website Hosting Services Taxed in Texas

Texas Comptroller deemed a corporation’s cloud-based website hosting services taxable as data processed for customers located within Texas in a private letter ruling.

Arkansas Issues Guidance on Taxability of Digital Subscriptions

Arkansas has issued an opinion discussing the taxability of digital subscriptions.

Iowa Expands Tax Base to Include Specified Digital Products

Iowa has enacted legislation that subjects specified digital products and services to state sales and use tax with exemptions for use by commercial enterprises.

Iowa Enacts Remote Seller Nexus Provisions

Iowa Governor Kim Reynolds has signed legislation containing extensive remote seller nexus provisions, effective January 1, 2019.

Kentucky Makes Changes to Definition of Prewritten Computer Software

Kentucky has enacted legislation that makes changes to the state’s sales and use tax definition of “prewritten computer software.”

Texas Updates Rule for Computer Hardware, Programs and Services

Texas updated its sales tax rule based on previously enacted legislation and department policy for computer hardware, programs, services, and sales.

Taxpayer Providing Digital Certificates Does Not Qualify for Human Effort Exclusion

A taxpayer that provides digital SSL certificates to businesses hosting commercial websites was liable for Washington sales tax and retail business and occupation tax.

Information Retrieval Products Taxable in Pennsylvania

Pennsylvania determined that a taxpayer’s sales of information retrieval products are subject to sales and use tax as tangible personal property.

Indiana Enacts Exemption for Cloud Software Transactions

Effective July 1, 2018, Indiana has enacted an exemption for cloud software transactions.

Wisconsin Sales Tax on Internet Access Charges Repealed Effective July 1, 2020

Wisconsin’s sales tax on internet access charges is repealed as part of the state’s enacted budget bill, effective July 1, 2020 and due to a permanent extension of the Internet Tax Freedom Act.

Sales of Banking Software Not Taxable in Indiana

Online banking, online bill payment, and mobile banking products sold to financial institutions are considered nontaxable services in Indiana, and are not subject to sales or use tax.

Pennsylvania Issues Revised Ruling on Software Support Services

The Pennsylvania Department of Revenue clarified its position regarding the taxability of consulting and training services related to canned computer software and its definition of “support” on April 4, 2017.

Report Fees Paid to Third-Party Software Provider Taxable in Tennessee

A taxpayer that provides transcription services to clients is subject to Tennessee sales and use tax on report fees paid to a third-party software provider.

New York Announces Cap for Sales Tax Exemption for Electronic News Services

New York provides an exemption from sales and use taxes on certain electronic news services. To qualify for the exemption, the service must be sold at or below a cap amount.