Digital Economy

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The New York State Department of Taxation and Finance recently released advisory opinion TSB-A-20(70)S, concluding that a taxpayer’s service of creating and hosting websites and applications (apps) for mobile devices is nontaxable. The taxpayer’s customers are retailers of consumer goods, and the customer’s users access the website or app to purchase items from the…

The Ohio Department of Taxation recently issued an FAQ addressing the gross receipts calculation regarding remote sellers’ registration and tax remittance requirements. Following South Dakota v. Wayfair, Ohio required remote sellers to register with the Department and begin collecting sales tax if the seller had greater than $100,000 in gross receipts or at least…

In a private letter ruling, the Illinois Department of Revenue ruled that an out-of-state taxpayer that provided software subscriptions and related hardware for one bundled price was subject to the Service Occupation Tax, not the Retailers’ Occupation Tax, Use Tax, or Service Use Tax. The customer owns the hardware, but the taxpayer retains ownership…

Iowa recently issued updated guidance regarding the taxation of specified digital products, software and related services. The guidance provides that web hosting is not a taxable service, explaining that, as opposed to web-based storage, web hosting “is focused on the publication of the data and not its mere storage.” Therefore, the guidance concludes that web

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The California Department of Tax and Fee Administration (CDTFA) revised its revised Publication 109, Internet Sales to add information relating to local sales taxes. Updated Publication 109 clarifies that online retailers are required to allocate sales among local jurisdictions, either directly or through a “countywide pool.” California generally imposes a 7.25% sales tax (with 1%…

The Mississippi Department of Revenue recently proposed a rule expanding the state’s sales tax to cloud computing.

The proposed amendments to the provisions regarding taxable computer equipment and services define “cloud computing” as “the delivery of computing resources, including software applications, development tools, storage, and servers over the Internet.” The term “cloud computing” includes the…

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…