Software/Hi-Tech

Virginia Expands Sales Tax Exemption for Network Equipment

The Governor of Virginia, Glenn Youngkin, has signed H.B. 1155, which expands the sales and use tax exemption on equipment that is used to provide internet services.

State of Connecticut Rules Online Learning Plans Not Taxable as Digital Goods

On April 21, 2022, the Connecticut Department of Revenue issued Ruling No. 2022-2 determining that online learning plans are not taxable digital goods.

Service Providers: Don’t Assume You Are Always Tax-Free!

Service providers—especially in the professional services realm—can be quick to assume that their services are nontaxable and that they do not need to collect sales tax and remit sales tax on their sales of services.

Texas Rules Loan Document Packages Subject to Sales Tax

The Texas Court of Appeals ruled that a law firm’s purchases of packages containing the legal documents necessary to execute residential mortgage loans should be classified as purchases of data processing services, which is subject to sales tax.

Washington Subjects Computer Storage Space to B&O Tax

The Washington Department of Revenue determined that a taxpayer providing customers space in a secure facility in which to store computer equipment and pair it with internet access services is subject to the state’s Business & Occupation (B&O) tax.

Illinois Clarifies Taxation of Software as a Service

The Illinois Department of Revenue has issued a private letter ruling regarding the taxation of software as a service and cloud-based remote work tools.

New York Grants Sales Tax Refund to Online Loan Marketplace

A New York taxpayer, an online loan marketplace, filed a petition against the Department of Revenue for a sales tax refund from the state since its primary function is not as an information services provider.

The European Union’s Proposed Digital Levy Due to be Removed

The European Union had a proposed digital levy that would help fund the region’s recovery from the COVID-19 pandemic and due to historic bond borrowing.

California Clarifies Sales Tax for Mixed Newspaper Subscriptions

California now requires publishers to determine if their newspaper sales are considered mixed newspaper subscriptions due to its effect on sales tax.

Texas Determines the Sales and Use Tax Treatment of a Mobile Ordering Application Platform

In a private letter ruling, the Texas Comptroller clarified the sales and use tax requirements for a mobile ordering application platform where restaurants receive food orders.

Bundled Hardware and Software Subscription Subject to Service Occupation Tax in Illinois

The Illinois Department of Revenue ruled that a taxpayer providing software subscriptions and hardware for a bundled price is subject to the Service Occupation Tax, but not Retailers’ Occupation Tax, Use Tax, or Service Use Tax.

Iowa Adds Guidance About Sales Tax for Web Hosting Services

The Iowa Department of Revenue issued guidance stating that web hosting is not taxable as a service in the state.

Tennessee Rules Online Cloud-Based Platforms Not Taxable

The Tennessee Department of Revenue ruled that a company with two offerings on a cloud-based platform are nontaxable.

Mississippi Amends Tax Treatment of Cloud Computing

The Mississippi Department of Revenue has proposed amendments to their regulations for the tax treatment of computer equipment, software, and certain related services.

California State Court Rules that Local Video Service Provider Fees Do Not Apply to Streaming Video Providers

The California court made their decision in line with Nevada’s similar case which ruled that streaming video providers are not subject to local franchise fees.

Texas Court Dismisses Local Franchise Fee Suit Against Streaming Companies

The City of New Boston, TX filed a suit against Hulu and other streaming services claiming that they owed local franchise fees.

Colorado Department of Revenue Issues Conclusion on Sales and Use Tax for Online Education Platforms

In a recent private letter ruling, the Colorado Department of Revenue concluded that subscription fees for online learning platforms are subject to the state’s sales tax and state-administered local sales tax.

Hawaii Clarifies Sales Tax Treatment of Software

The Hawaii Department of Taxation issued a release to clarify the treatment of sales of software with regards to their general excise tax (GET).

Washington Provides Clarity on Application of Sales and B&O Tax to Online Classes

The state of Washington has published an article clarifying the application of sales and business and occupational taxes to providers of online classes.

Kentucky Enacts Manufacturing Electricity Exemption for Mining of Cryptocurrency

On July 1, 2021, the state of Kentucky enacted a new sales tax exemption for electricity that is used or consumed in the commercial mining of cryptocurrency.

Canadian Laws for Non-Resident Vendors of Digital Products and Services, Users of Fulfillment Warehouses, and Short-Term Rentals Come into Effect

On July 1, 2021, three new measures created under Bill C-30 came into effect requiring non-resident businesses to begin collecting GST/HST on sales of digital goods and sales made through digital platforms.

Massachusetts Rules Software Apportionment Rules Can Be Used for Abatement and Refunds

On May 21, 2021, the Supreme Judicial Court of Massachusetts upheld an appeals court ruling that the Commonwealth\’s rules allowing for apportionment of software for sales tax can be used for abatement after the tax has already been paid.

New York Releases Advisory Opinion on Software and Consulting Services

In an Advisory Opinion dated November 17, 2020, the New York Commissioner clarified their position on the taxability of consulting services that provide access to online customer portals.

Colorado Enacts New Legislation Codifying Treatment of Digital Goods as Tangible Personal Property

On June 23, 2021, the Governor of Colorado signed H.B. 1312, officially bringing the law in line with the state\’s practice of applying sales and use tax to digital goods.