Digital Economy

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The Tennessee Department of Revenue posted sales tax letter ruling number 21-08 on October 12, 2021 (issued August 2021) in which the Department determined that an online cloud-based platform’s charges to commercial freight transportation brokers and carriers were not subject to sales tax. The platform offers two cloud-based remote access services, one of which allows…

The Streamlined Sales Tax Governing Board has requested input on whether to change the Streamlined Agreement’s rules on how to source sales of digital goods where purchasers do not provide addresses when completing the transaction. Without the full delivery address that would be obtained if a physical product was being delivered, a seller of digital…

A Massachusetts representative has introduced House Bill 4179, a proposed 6.25% excise tax on gross revenue from digital advertising provided within Massachusetts. Following its introduction, House Bill 4179 was referred to the Legislature’s Joint Committee on Revenue for review. The bill proposes to tax revenue sourced to Massachusetts arising from banner advertisements, search engine…

On September 20th, the Los Angeles County Superior Court held that local video service provider fees do not apply to streaming video providers. This decision is consistent with a prior decision by the United States District Court for the District of Nevada, which held that streaming video providers were not subject to Nevada localities’ franchise…

The Illinois Department of Revenue recently released General Information Letter ST-21-0025-GIL, providing that an e-commerce retailer’s provision of tangible personal property to its subscribers for sampling prior to deciding whether to buy was not a taxable transaction, while an eventual purchase of the property was taxable. The taxpayer, based outside of Illinois, operates an…

On September 3, 2021, the United States District Court for the District of Nevada held that streaming video providers were not subject to Nevada localities’ franchise fees. The city of Reno filed a class action lawsuit against two streaming video providers, claiming that they were required to register as video service providers (i.e., obtain a…

On September 10, 2021, the California Department of Tax and Fee Administration (the CDTFA) proposed amendments to the CDTFA’s regulations governing drop shipments, in an effort to clarify that marketplace sales are not drop shipments. In October 2019, the California Marketplace Facilitator Act became effective, making marketplace facilitators the seller and retailer for sales facilitated…

On September 2, 2021, the Colorado Department of Revenue issued private letter ruling PLR 21-005 concluding that subscription fees for an online learning platform are subject to sales tax. The taxpayer operates an online learning platform offering on-demand digital courses comprised of streaming video lessons covering academic subjects and vocational license preparation courses. Each subscription…

The New York Department of Taxation and Finance recently published advisory opinion TSB-A-20(66)S regarding the taxability of photographs provided to purchasers either digitally or through a tangible medium for less than permanent use. The Department held that the electronic transfer of photographs is not taxable in New York because a digital photograph is not considered…

The Washington Department of Revenue recently released informal guidance regarding the taxability of online instructional classes. The guidance states that live classes where participants can interact in real-time with the presenter are not subject to sales tax; however, pre-recorded videos and classes are subject to sales tax. This distinction focuses on the live ability to…