We are pleased to provide the following updates on state tax issues impacting the digital economy. The Sutherland SALT Team will continue to monitor these and other Digital Economy developments. Please visit the Sutherland SALT Digital Economy Forum to learn more, and please contact one of us if you have questions regarding the Forum.
Texas Comptroller: No Multistate Benefit for You!
In Decision No. 105,442, the Texas Comptroller of Public Accounts denied a telecommunications company’s refund claim for sales and use taxes paid on services related to custom software housed on switches located outside of Texas. The Comptroller ruled that the taxpayer, which had a principal place of business outside the state, did not show by clear and convincing evidence that such charges were eligible for the “multistate benefit exemption” or otherwise should not be included as part of the sales price of the custom computer software.
Indiana DOR: Authentication Services Via the Provision of a Digital Certificate Not a Specified Digital Product or Computer Software
The Indiana Department of Revenue has ruled that sales of “authentication services” for customers “seeking to perform secure electronic commerce and communications over the internet” were not subject to sales and use tax as either a specified digital product or prewritten computer software.