A North Carolina company provides subscriptions to industry specific information in their cloud which customers can access by paying for a subscription. By paying the fee, customers can access reports which are not customized and are the same for all paying customers. Customers are able to view the information from the cloud, and they are also able to download and print the information. The web-based reports are used by customers to gain access to client insights.
North Carolina imposes sales tax on subscription fees for “certain digital property.” In this situation, the reports the taxpayer sells in the subscription are classified as “certain digital property”. Therefore, the subscription fees for these transactions are subject to North Carolina’s sales and use taxes. (North Carolina Department of Revenue, Private Letter Ruling No. SUPLR 2021-0019, April 29, 2021)