The purchase of point-of-sale (POS) services by a taxpayer was subject to Washington sales and use tax as taxable digital automated services. The taxpayer unsuccessfully argued that the POS services were exempt data processing services. The taxpayer claimed that payment was made for the manipulation and analysis of data. The taxpayer also argued that the software purchased to receive the POS services was separate, incidental and immaterial in value. The contract shows that the POS services involve gathering sales and inventory data and the use of software tools that allow the taxpayer to track and analyze its purchase and sales activities. These services go beyond the definition of exempt data processing, which is limited to extracting the required information in an appropriate form or converting data to usable information. The Washington DOR determined that the taxpayer is purchasing a larger business solution that falls under taxable digital automated services, not exempt data processing services such as check processing, image processing, payroll processing, claim processing, and similar activities. As such, the purchase of POS services is subject to Washington sales and use tax. (Determination No. 16-0374, Washington Department of Revenue, October 7, 2019)