The North Carolina Department of Revenue issued a letter ruling that concluded an online platform owner and administrator was not a marketplace facilitator because it neither collected nor otherwise processed payment for any items sold on the website. The taxpayer requesting the ruling was an affiliate of original equipment manufacturers “OEMs), and operated a platform
Digital Economy
Illinois DOR issues guidance on taxability of computer software licenses and maintenance agreements
The Illinois Department of Revenue (IDOR) released a general information letter outlining the applicability of Illinois Retailers’ Occupation Tax (ROT) on computer software licenses and maintenance agreements.
The letter states that sales of “canned” computer software are taxable retail sales in Illinois and are considered to be tangible personal property regardless of the form in…
Texas Talks: Comptroller incorporates federal statutes and regulations to Texas R&D credit incentives
The Tax Policy Division of the Texas Comptroller of Public Accounts issued guidance summarizing certain federal statutes and regulations related to Internal Use Software (IUS) that are now incorporated-by-references into Texas’ research and development (R&D) laws. Specifically, for purposes of the franchise tax R&D credit laws and the sales tax R&D exemption, the Comptroller incorporates-by-reference…
The New York Division of Tax Appeals finds vendor management fees are taxable sales of pre-written software
An administrative law judge at the New York Division of Tax Appeals found that a company’s vendor management fees were taxable as the sale of pre-written software. The company offers a web-based application that helps to manage and procure staffing services from requisition through billing. The company argued that its fees are not taxable because…
Massachusetts Supreme Judicial Court holds Massachusetts could not enforce pre-Wayfair computer cookie use tax collection law
On December 22, 2022, the Massachusetts Supreme Judicial Court held that a taxpayer’s use of computer cookies did not constitute substantial nexus with the state for periods prior to the United States Supreme Court’s decision in South Dakota v. Wayfair, Inc. The taxpayer sold auto parts entirely online and utilized cookies to track customers…
New Jersey Division of Taxation hints at possible cloud computing tax
A recent report issued by the New Jersey Division of Taxation includes a suggestion that state lawmakers consider a cloud computing tax. The report titled, “Studying the Impact of the Digital Economy” recommends adopting a sales and use tax model that differentiates between physical good and services and digital goods and services. The report notes…
More digital advertising and data tax legislation introduced
New York and Massachusetts are the latest states to introduce tax legislation targeting digital advertising and data collection. Like the similar bills introduced earlier in Connecticut, New York, and Indiana, proposals similar to these latest New York and Massachusetts bills have been rejected by the respective legislatures in prior sessions.
New York revisits …
Indiana bill would adopt social media tax
Representative J.D. Prescott (R) introduced Indiana HB 1517, which would impose a surcharge tax on social media providers. HB 1517 is similar to legislation introduced by Representative Prescott during the 2021 and 2022 legislative sessions that did not make it out of committee.
Specifically, HB 1517 would impose a surcharge tax on social media…
Digital advertising and data tax proposals introduced in Connecticut and New York
A number of Connecticut digital advertising bills and a New York data tax bill have been introduced to jumpstart the 2023 legislative sessions. Both states have considered – but ultimately rejected – legislation that would adopt targeted taxes on the digital economy in recent years.
On January 18, 2023, proposed legislation was filed in the…
Missouri publishes remote seller and marketplace facilitator FAQs
The Missouri Department of Revenue recently published remote seller and marketplace facilitator FAQs regarding the implementation of the state’s remote seller and marketplace facilitator use tax collection requirement. Beginning January 1, 2023, vendors (including marketplace facilitators) selling tangible personal property into Missouri must collect use tax on the retail sale price if the vendor’s gross…