On March 15, 2022, the Ohio Supreme Court determined that the Ohio Board of Tax Appeals (BTA) must apply the true object test when determining whether a bank purchased nontaxable custom software or taxable services. The taxpayer was a bank that purchased computerized services which allowed the bank to run transactions on a daily basis
Digital Economy
Virginia sales tax applies to software purchases where no express proof of electronic delivery
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Business-to-business platform is a North Carolina marketplace facilitator
The North Carolina Department of Revenue issued a private letter ruling finding that a business-to-business online platform where businesses list inventory for sale for other businesses to order and pay was a marketplace facilitator responsible for collecting and remitting tax on sales that took place over its platform. The platform was not open to the…
Tennessee Department of Revenue rules platform is software, implementation and content fees taxable
The Tennessee Department of Revenue ruled recently that an information technology company’s platform product was subject to Tennessee sales and use tax. The platform was used to support a decision-making process.
The platform was hosted on Taxpayer or third-party servers, and users accessed the platform from their employer’s electronic software system. The platform was highly…
New York Tax Appeals Tribunal concludes IT managing and monitoring services are taxable
The New York Tax Appeals Tribunal upheld the New York Division of Tax Appeals’ determination that an information technology security company provides a taxable protective service. The taxpayer provides monitoring and firewall management services, by configuring its customers’ software and devices to prevent malicious activity. The Department of Taxation and Finance asserted that the taxpayer’s…
Breaking news: Federal court dismisses legal challenge to Maryland digital advertising tax
On March 4, 2022, the United States District Court for the District of Maryland partially dismissed a challenge to the Maryland Digital Advertising Gross Revenues Tax.
- The plaintiffs asserted that the Tax violates the Internet Tax Freedom Act and the Commerce and Due Process Clauses of the United States Constitution.
- The federal court held that
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Loan packages taxable data processing in Texas
The Texas Court of Appeals ruled that a law firm’s purchases of loan packages for lending institution clients was the taxable purchase of data processing services. The law firm purchased loan packages consisting of promissory notes, deeds of trust, tax disclosures and other pertinent legal documents from vendors. The law firm argued that the “essence…
Missouri Senate votes to bring digital product tax referendum to voters
Missouri Senate Joint Resolution 33 provides that voters will decide whether to amend the state constitution to tax digital products. Missouri’s constitution prohibits expanding the sales and use tax to any services that were not taxable as of January 1, 2015. Joint Resolution 33 proposes to allow taxation of “subscriptions, licenses for digital products, and…
California says certain online activities and remote workers eliminate P.L. 86-272 protection
In Technical Advice Memorandum (TAM) 2022-01, the California Franchise Tax Board (FTB) considered whether remote workers and various online activities eliminate P.L. 86-272 protection. In large part reflecting the Multistate Tax Commission (MTC) guidance issued last year, the TAM concludes that a variety of activities may disqualify a taxpayer from the protections provided…
Computer storage space subject to Washington B&O tax
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…