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News & Tips

Here you can read up on significant developments in the world of sales and use tax. Find the latest legislative updates and helpful tips to keep you in compliance across all 50 states. You can filter news items by topic and/or a jurisdiction of interest.

Collection and Remittance of Tax on Credit Rating Services for Legal Entities Begins July 1, 2023 in Texas

The Texas Comptroller of Public Accounts has issued a policy letter stating that the provision of credit rating services for legal entities is subject to sales and use tax, and taxpayers must begin collecting and remitting tax on these services beginning July 1, 2023.

Pennsylvania High Court Rules on Application of Coupons in Sales Tax Calculations

The Supreme Court of Pennsylvania ruled in favor of the state in a case brought by a customer over a denied refund of overpaid sales tax on orders where coupons were used.

South Dakota Drops 200 Transaction Count from its Economic Nexus Threshold

On February 13, 2023, South Dakota Governor Kristi Noem signed Senate Bill 30 into law, which eliminates the 200-transaction threshold from South Dakota’s economic nexus threshold, effective July 1, 2023.

Antimicrobial Agents Did Not Qualify for Wholesale Exemption in Alabama

A taxpayer that operates a poultry processing plant in Alabama was not entitled to a refund of sales and use tax paid on purchases of antimicrobial agents since it failed to prove that the purchases were non-taxable as a “wholesale sale.”

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).

Taxpayer Doesn’t Meet Definition of Marketplace Facilitator in North Carolina

A North Carolina taxpayer who is an affiliate of original equipment manufacturers (OEMs) does not meet the definition of a “marketplace facilitator” per a private letter ruling from the North Carolina Department of Revenue.

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.

Illinois Amends Administrative Code to Address Specifics of Leveling the Playfield for Out of State Sellers

Effective January 23rd, the Illinois Department of Revenue adopted amendments to their use tax rules to provide guidance in line with the state\’s Leveling the Playing Field for Illinois Retail Act, which originally came into effect on January 1, 2021.

Illinois Issues Guidance on Taxability of Sporting Event Ticket Sales

The Illinois Department of Revenue (DOR) issued a General Information Letter (GIL) providing guidance on the taxability of sporting event ticket sales.

City of Norfolk, VA Loses Bid to Tax Cox for Internet Services

Judge David W Lannetti of the Fourth Judicial Circuit of Virginia dismissed the City of Norfolk’s case against Cox Communications with prejudice on January 27, 2023.

New York Department of Taxation and Finance Refusal to Issue Certificate of Authority Upheld

After reviewing the facts of the case and considering petitions from both sides, the Administrative Law Judge determined the Department of Taxation was within its power to refuse to issue a certificate of authority despite Bar 13, Inc declaring Chapter 11 Bankruptcy because the Department had previously revoked Bar 13’s certificate of authority.

Colorado Implements Single Use Bag Fee and Single Use Plastic Bag Ban

The Colorado General Assembly has enacted House Bill 21-1162, which impacts in-state retailers, including retail food establishments, who provide single use bags to customers at the point of sale. This bill is attempting to significantly reduce the use of single use plastics due to the harm they can have on the environment.

New Mexico Court Rules Staffing Agencies are Obligated to Pay Gross Receipts Tax

A New Mexico court ruled a psychiatric services provider was subject to the state’s gross receipts tax, contrary to New Mexico Statutes Sec. 7-9-77.1. The reason for this departure is due to the way the taxpayer was contracted.

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.

Audit Assessment in Alabama Upheld due to Failure to Maintain Records

The Alabama Tax Tribunal affirmed that a convenience store operator (taxpayer) was properly assessed sales and use tax and fraud penalties under audit.

Texas Appeals Court Denies For-Profit Correctional Facility’s Use of Government Exemption

A Texas appeals court has denied a refund claim brought by a private operator of correctional and detention facilities, holding a lower court\’s decision that the company does not act as a instrumentality of the state or federal government while operating state and federal prisons.

Washington Superior Court Dismisses Case Challenging Tax Collection by Grocery Chains

The Washington Superior Court, King County, has dismissed a class action suit brought against multiple grocery chains. The claim alleged that the grocery stores in question improperly collected tax on transactions that should have qualified as exempt sales of food and food ingredients.

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.

Tennessee Passes Legislation Regarding Taxing Temporary Services

Companies doing business in Tennessee and seeking the aid of temporary workers should carefully review job postings, with the understanding that other than this in-house exemption, the services of individuals related to software may be taxed.

Minnesota Updates Sales Tax Facts on Detective and Security Services

Minnesota has made general updates to a Sales Tax Fact Sheet 114 that provides guidance regarding detective and security services.

Hawaii Updates Guidance on GET for Medical and Dental Services

Hawaii Department of Taxation issued Tax Facts 98-1 updating its information on the general excise tax (GET) as it applies to medical and dental services.

Florida Judge Recommends DOR Finalize $200,000 Tax Bill for Party Equipment Business

Administrative Law Judge Brittany O Finkbeiner recommended the Florida Department of Revenue should finalize a $208,287 assessment against a Tallahassee party equipment business in Fun City Inc v. Department of Revenue.

Texas Comptroller Explains Remote Seller, Marketplace Tax Policies

The Texas Comptroller of Public Accounts has offered new guidance and answers to FAQs for marketplace sellers and marketplace provides.