Digital Economy

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On February 6, 2022, the Washington Department of Revenue’s Administrative Review and Hearings Division issued a determination concluding that a company providing a license to use data center space owes business and occupation (B&O) tax on the profits from the service. The taxpayer provides colocation services, which includes renting space in data center facilities for…

In a private letter ruling, the Texas Comptroller concluded that a medical record retrieval company was providing a taxable data processing service only to the extent it charged for copying of the records it retrieved. The Texas-based medical records retrieval company’s customers are attorneys and insurance companies. The company’s employees manually retrieve and review…

South Dakota Senate Bill 157 proposes an exemption from gross receipts tax for sales of “enterprise information technology equipment” and software in excess of $2 million used in South Dakota data centers. Enterprise information technology equipment eligible for the exemption includes: (i) computer hardware, servers, routers, cooling systems and towers; (ii) temperature control and power

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In a recently released private letter ruling (issued October 13, 2021), the Wisconsin Department of Revenue concluded that certain online learning platform services were not subject to sales tax, whereas others were a bundled transaction and potentially taxable. The company’s platform is a virtual learning environment where students stream on-demand digital academic courses that consist

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Following on Maryland’s heels, there are currently five separate digital advertising tax measures pending before the Massachusetts legislature. H. 2894 would impose a 5% tax on the annual digital advertising revenue from companies generating more than $25 million in digital advertising sales in Massachusetts. H. 2928 would not impose a tax directly, but would create…

The New York Tax Appeals Tribunal mostly affirmed the New York Division of Tax Appeals determination that a company’s provision of advertising measurement services was a taxable information service. The taxpayer provides services to its clients that measure advertising effectiveness. New York taxes the provision of information services, but exempts information services that are personal…

The Missouri Department of Revenue released a private letter ruling issued in December 2021 determining that a company’s private wireless network was not subject to Missouri sales tax. The company provides wireless services in Missouri, including voice, messaging, Internet access and private network services. The private network services provide machine-to-machine data transmission, which is segregated…

The Minnesota Department of Revenue has released updated guidance regarding the state’s requirement that out-of-state marketplace providers collect and remit Minnesota sales tax if their total sales (including facilitated sales) over the prior 12-month period total either 200 or more retail sales shipped to Minnesota, or more than $100,000 in retail sales shipped to Minnesota.…

The Massachusetts Appellate Tax Board found that software-as-a-service (SaaS) provider Akamai Technologies Inc. was a manufacturing corporation, rather than a service provider. Akamai, headquartered in Massachusetts, provided software-based cloud services allowing customers to manage the delivery of web and media content over the Internet. In Massachusetts, a manufacturing corporation must use single sales factor apportionment,…

An Alabama legislator has re-introduced a bill that would expressly exempt “virtual currency” from ad valorem tax. Alabama broadly imposes its ad valorem tax on all property, unless expressly exempt. Under current law, several other forms of currency are enumerated as exempt, such as “money on deposit in any bank or banking institution and all…