Digital Economy

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The Arizona Department of Revenue recently released Private Taxpayer Ruling LR 21-003 (dated May 27, 2021), finding that gross income arising from the provision of temporary use of digital information and data is subject to the transaction privilege tax (TPT). The taxpayer is an information and analytics company that provides primarily publically available information and…

Effective July 1, 2021, Kentucky has enacted sales tax and utility gross receipts exemptions for certain transactions involving the commercial mining of cryptocurrency. The Kentucky DOR explained the two recently enacted bills here. HB 230 exempts the sale or purchase of electricity used or consumed in the commercial mining of cryptocurrency from sales tax and…

New Jersey’s 2022 Fiscal Year appropriations bill requires the New Jersey Division of Taxation to conduct a study of the state tax laws in relation to the “digital economy” and make recommendations on gaps in the current law. The Division’s study must “quantify how various taxes have expanded or reduced the economic activity, and State…

On June 30, 2021, Delaware’s Governor signed into law Senate Bill 103, which adds “virtual currency” to the definition of “property” subject to the reporting and remitting requirements of Delaware’s unclaimed property law. “Virtual currency” is “a digital representation of value, including cryptocurrency, used as a medium of exchange, a unit of account, or…

Louisiana codified an individual income tax exemption for “digital nomads.” SB 31 (Effective Jan. 1, 2022). “Digital nomads” are defined as individuals who establish residency in Louisiana after December 31, 2021, have health coverage, and work remotely, full-time for a nonresident business. The exemption applies to 50% of the digital nomad’s gross wages, not to…

On June 23, 2021, Colorado’s Governor signed legislation adding “digital goods” to the statutory definition of “tangible personal property” subject to sales and use tax. HB 21-1312 (Effective July 1, 2021). The bill states that it interprets the definition of “digital goods” consistent with “the department of revenue’s long-standing treatment of digital goods, as reflected…

In an effort to curb the Texas Comptroller’s recent expansion of the tax imposed on data processing services, the Texas legislature has specifically excluded payment processing services from sales and use tax. Texas taxes data processing services, which includes “word processing, data entry, data retrieval, data search, information compilation, payroll and business accounting data production…

On June 17, 2021, the Standing Subcommittee of the Multistate Tax Commission’s (“MTC”) Uniformity Committee discussed a potential new project recommendation for the Uniformity Committee. During the meeting, MTC staff presented a draft memo outlining the pros and cons of creating a uniform model statute for the taxation of digital products. Ultimately, however, the Committee…

The Illinois Department of Revenue Issued letter ruling ST 21-0001, addressing the retailer’s occupation tax and use tax treatment of a company’s fleet management service. The company provided a web-based management service for the administration, management, and record-keeping of motor vehicle fleets. The company used a Software as a Service (SaaS) model that allows…

The Department of Taxation and Finance recently issued advisory opinion numbered TSB-A-20(63)S (dated November 17, 2020) in which it concluded that the primary purpose of a marketing-consulting service was a nontaxable service, even though the taxpayer’s customers had access to software. The taxpayer assists automotive industry clients in designing and launching effective marketing campaigns and…