Software/Hi-Tech

Illinois Issued a Letter Discussing Taxability of Various Digital Goods

The Illinois Department of Revenue issued a general information letter encompassing the applicability of sales and use tax to the sales of various digital goods by a digital goods distributor (taxpayer).

Louisiana Board of Tax Appeals Rules ITFA Prohibits Taxing Cloud Storage

After performing an audit on Apple, the City of New Orleans issued an assessment on September 20, 2021, which included almost $136,000 in taxes on subscription fees for Apple’s iCloud, which Apple challenged.

Texas Letter Ruling Says Audiovisual and Videoconferencing Equipment and Services are Subject to Tax

The Texas Comptroller released a Letter Ruling on January 3, 2023, which found that a taxpayer’s audiovisual and videoconferencing equipment and the related services, both on-site and remote, are taxable under Texas law.

Florida State Law on Refunds and Over-collection

A Florida judge determined that Oracle America, a software company, was ineligible for a tax refund filed with the state after the tax was over-collected.

Arizona Appeals Court Re-Affirms State Position on Remote Software Licensing

The Arizona Court of Appeals ruled in favor of the Department of Revenue, rejecting a refund request from an HR software company that challenged the taxation of their sales of software licenses.

Indiana Updates Computer Software Guidance Document

The state of Indiana has released an update to their Information Bulletin #8, which addresses the specific tax treatment of computer hardware, software, and digital goods.

California Issues Guidance on Taxability of Cryptocurrency

The California Department of Tax and Fee Administration (CDTFA) has issued guidance on the sales and use tax treatment of cryptocurrency.

Taxing Digital Goods and Services: Recent Shifts and Trends

Let’s take a look at recent legislation states have put on the books and delve into new trends in digital goods and what to watch for in our virtual-driven world.

Tennessee Issues Letter Ruling Clarifying Advertising Services vs Computer Software

Tennessee issued a letter ruling stating tax should be paid on a subscription-based product which allows users to create and manage advertisements for rental properties.

Tennessee Letter Ruling on Data Processing Service

Tennessee issued a letter ruling clarifying that a company headquartered within Tennessee is not subject to Tennessee sales and use tax.

Streaming Company’s Platform Credits Not Taxable in Colorado

Colorado has issued a private letter ruling stating that “platform credits” offered by a company that offers video streaming services are not subject to Colorado sales tax.

Wisconsin Issues Guidance on Tax Treatment of Non-Fungible Tokens

Wisconsin has issued guidance on the taxability of non-fungible tokens (NFTs) in its most recent monthly tax bulletin.

Maryland Enacts New Tax on Digital Advertising

The Maryland legislature overrode Governor Larry Hogan’s veto of a new tax on digital advertising (H.B. 732) on February 12, 2021, making Maryland the first state in the country to adopt a tax on digital advertising.

Minnesota Adds NFT Clarifications to Digital Product Sales Tax Fact Sheet

Minnesota has provided clarity to the taxability of non-fungible tokens (NFTs) due to an increase in use. NFTs entitle the purchase of goods and services, according to the recently updated fact sheet, when NFTs are used to purchase taxable products.

Washington issues interim statement regarding the taxability of non-fungible tokens

Purchases of non-fungible tokens, or NFTs, are taxable in most cases and sellers of NFTs are subject to Washington business and occupation (B&O) tax on gross proceeds, according to an interim statement provided by the Washington Department of Revenue in July.

Challenge to Chicago’s streaming tax settled between the city and Apple

Apple and Chicago agreed to settle a lawsuit claiming the city’s 9% streaming tax was unconstitutional.

Maryland Updates Digital Products Definition with New Exclusions

On July 1, 2022, Maryland changed the definition of a digital product to make application of sales and use tax exclude certain products.

Washington Taxes Account Access Services

The Washington Department of Revenue (DOR) denied a company seeking to claim sales tax exemptions for their account access services to credit unions.

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.