Software/Hi-Tech

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.

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.