On February 20, 2020, the Maryland House of Delegates introduced HB 1628, which would reduce the sales tax rate from 6% to 5% and expand the base to tax almost all services. If passed, the bill would take effect January 1, 2021. This bill is sponsored by key members of House leadership, including the House Majority Leader, the Chief Deputy Majority Whip, and the Chairs of the Ways and Means, Economic Matters, and Appropriations Committees. The bill is currently assigned to the House Rules and Executive Nominations Committee.
During a hearing held on February 20, 2020, the South Dakota House of Representatives’ Taxation Committee approved an amendment to House Bill 1284, striking the proposed elimination of the sales tax exemption for advertising services. The bill’s sponsor, Representative Finck (Republican), introduced the amendment himself. He clarified that he did not intend to tax all advertising services. Rather, he thinks that there are certain services being misconstrued as “advertising” that should be subject to sales tax (such as website creation). He expressed his hope that this issue would be addressed in further discussions. Members of the Taxation Committee noted that a tax on advertising and business inputs would cause economic distortion, raise production costs, and place businesses at a competitive disadvantage. The bill, as amended, is now headed to the House of Representatives’ Transportation Committee for further discussion on its remaining provisions, which would create a road improvement priority fund.
Florida’s proposed tax on peer-to-peer car sharing companies, H.B. 377, cleared its first hurdle and passed the state House Ways and Means Committee on February 11. The bill would require car-sharing companies to collect a 6% sales tax on vehicle leases made through their platforms. Also, under the proposed bill, leases made through the company platforms will be subject to a $2 surcharge.
The Colorado DOR proposed a regulation on February 7 intended to “clarify” the tax treatment of digital goods as tangible personal property. The proposed regulations include measures that clarify that the method of delivery does not impact the taxability of the property and that the purchase of certain streaming service subscriptions constitutes a sale of property.
Missouri lawmakers have proposed H.B. 1957, which would require vendors engaging in business activities in Missouri with gross receipts from in-state sales of tangible personal property totaling $100,000 or more during a 12-month period to collect and remit use tax. The bill would also require marketplace facilitators that reach the economic nexus threshold by January 1, 2021 to collect and remit sales and use tax on behalf of third party sellers. A similar measure, S.B. 648 was also introduced in the state Senate.
On February 6, 2020, South Dakota Representative Finck introduced House Bill 1284, which would repeal the sales tax exemption for sales of advertising services. The South Dakota sales tax broadly applies to sales of services, unless specifically exempt. The bill has since been referred to the House of Representatives’ Taxation Committee. On Thursday, February 20th, the committee will hold a hearing on the bill at 7:45 a.m. Central. The hearing can be live streamed here.
On February 11th, West Virginia Delegate Cody Thompson (Democrat) introduced House Bill 4898, which would impose a general data mining service tax. The bill would require “commercial data operators” generating revenue from the use, collection, processing, sale, or sharing of West Virginians’ user data to pay the tax at the rate of one cent per dollar of value of user data. The Commissioner would be granted the authority to develop the method to calculate the value of user data.
A commercial data operator is “an entity acting in its capacity as a consumer online services provider or data broker that: (A) generates a material amount of revenue from the use, collection, processing, sale, or sharing of the user data; and (B) Has more than 10,000 unique monthly visitors or users in West Virginia for a majority of months during the previous one-year period.” “User data” is defined as “any information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked with an individual user, whether directly submitted to the commercial data operator by the user or derived from the observed activity of the user by the commercial data operator.” The bill would require each commercial data operator, at least every 90 days, to provide an assessment of “the economic value that the commercial data operator places on the data of its users,” along with identifying the types of data it collects from users and the ways that data is used.
S.B. 2182 was introduced at the request of the governor. The bill would require marketplace facilitators with over $500,000 of annual in-state sales to collect and remit sales and use tax. If passed, the law would take effect on October 1.
Mississippi law requires “retailers” to collect and remit sales and use tax. In August 2018, the Mississippi DOR issued guidance that remote sellers with in-state sales above $250,000 are retailers required to collect sales and use tax. H.B. 379 would expand the definition of retailer to include persons who facilitate third-party sales with the same in-state sales threshold. The bill would take effect upon passage.
Under current Kansas DOR guidance, all remote sellers, regardless of size, are required to collect sales and use taxes. Kansas has introduced two bills to address the taxation of digital sales. H.B. 2537 would introduce a safe harbor for remote sellers with under $100,000 of gross revenues in the state. Additionally, H.B. 2513 would first impose the duty to collect sales and use taxes on marketplace facilitators that exceed a $100,000 in-state sales threshold. Last year, the Kansas governor vetoed a marketplace facilitator bill.