Digital Economy

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The Iowa Department of Revenue issued a bulletin explaining its sales tax exemption for purchases of computers, along with the recently-enacted exemption for purchases of computer peripherals. The exemption applies to computers and computer peripherals used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise. The guidance…

On January 13, 2021, the governor of Kansas released her budget report for fiscal year 2022, which would require marketplace facilitators to begin collecting retail sales and compensating use taxes on sales to Kansas customers on July 1, 2021. The budget also contains a proposal to impose sales tax on all sales of digital property…

On January 11, 2021, the New York State Assembly introduced A.B. 1612, which would impose a three dollar ($3.00) surcharge on each delivery transaction where the delivery is made within New York City. The surcharge would not apply to deliveries of food or essential medical supplies. Liability for the surcharge would be imposed on…

The Tennessee Department of Revenue posted Revenue Ruling #20-13 regarding whether a taxpayer is a marketplace facilitator subject to sales and use tax collection on sales made on its platform. The taxpayer in this ruling operates an online forum that connects retailers (mostly restaurants) with independent delivery persons. The definition of a marketplace facilitator in…

On December 29, 2020, the Rhode Island Division of Taxation issued a declaratory ruling concerning the taxability of marketing analytic services using proprietary software and an online dashboard hosted on the taxpayer’s own servers. The software and services help customers develop advertising services and evaluate the effectiveness of advertising. According to the Division, the taxpayer’s…

On January 7, 2021, New York senator Michael Gianaris introduced S.1124, which would impose a new gross revenues tax on digital ads. The tax would be imposed on the annual gross revenues any person derives from digital advertising services apportioned to the state based on digital advertising receipts. “Digital advertising services” is defined to…

On October 2, 2020, the Indiana Department of Revenue issued Revenue Ruling #2019-09ST concerning the sale of digital course materials to Indiana colleges and universities, which were made available to students on the schools’ online learning management systems. The Department determined that these sales were exempt from sales tax because: (i) the course materials were…

Representative J.D. Prescott (R) introduced Indiana House Bill 1312, which would impose a surcharge tax on social media providers.  This proposed bill shares similarities with proposed digital advertising taxes in Maryland and New York, except that Indiana’s proposed surcharge tax is targeted at social media providers deriving revenue from advertising services on their…

Legislation (S.302) was prefiled in the New York State Senate for the 2021-2022 legislative session that would expand the sales tax base to digital advertising services. The bill was prefiled by Democratic State Senator Kevin Thomas.

The bill defines “digital advertising services” as “advertisement services on a digital interface, including advertisements in…

On December 1, 2020, the Colorado Department of Revenue adopted amendments to its tangible personal property rule – Rule 39-26-102(15) – that will impose sales tax on sales of streaming digital goods. The Department considers these amendments to be a “clarification” of their tangible personal property definition. Now, per the amended regulation, “[t]he method of…