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.
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.
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.
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 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.
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.
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.
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.