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Digital Economy
Sutherland SALT Shaker: October 2013 Digest
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Click here to read our October 2013 posts on stateandlocaltax.com or read each article by clicking on the title. A printable PDF is also available here.
- Down for the Count, But Not Out: Colorado’s Remote Retailer Reporting Requirements Expected to Be Challenged in State Court
After the U.S. Court of Appeals for the Tenth
…
Short Shrift for the Short-Lived Tech Tax: Massachusetts’ Computer Design Services Tax Repealed in Less Than Two Months
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Posted in Digital Economy, Policy and Legislation
By Sahang-Hee Hahn and Timothy Gustafson
Less than two months after Massachusetts enacted a tax on computer design and software services (Tech Tax), the legislation was repealed with the passage of House Bill (HB) 3662 (for Sutherland’s previous coverage of this development, click here). The Tech Tax expanded Massachusetts’s sales and use tax…
What SAP in Minnesota? No Sales Tax on Software Consulting and Implementation Services, Says Minnesota Tax Court
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Posted in Digital Economy, Noteworthy Cases
By Maria Todorova and Prentiss Willson
The Minnesota Tax Court held that computer software consulting and implementation services were not subject to sales tax in Minnesota. The taxpayer, SAP Retail, Inc., licensed enterprise resource planning software. It also provided consultation and implementation services to configure the software to a customer’s particular business activities. The court…
Tennessee Clear on Cloud Services: Cloud Services Not Taxable Where Servers Are Out of State
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Posted in Digital Economy
By Jessica Kerner and Timothy Gustafson
The Tennessee Department of Revenue determined in a Letter Ruling that a taxpayer’s sale of remote storage services and virtual computing services are not subject to Tennessee sales or use tax where the data centers and servers used to provide such services are located outside the state. The…
It’s a WAN! IBM’s WAN Service Not a Telecommunications Service in Tennessee
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Posted in Digital Economy, Noteworthy Cases
By Mary Alexander and Andrew Appleby
The Tennessee Court of Appeals held a wide area network (WAN) service provided by IBM was not taxable because the true object of the service was not a “telecommunications service.” IBM’s WAN service was a technological infrastructure that enabled remote access to information by linking geographically separated computers. The…
Legal Alert: Illinois Click-Through Nexus Law Preempted by the Internet Tax Freedom Act
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In a 6-1 decision, the Illinois Supreme Court affirmed an Illinois Circuit Court holding that Illinois Public Act 96-1544 (The Click-Through Nexus Act), requiring out-of-state retailers to collect and remit use tax, violates the Internet Tax Freedom Act. Performance Marketing Ass’n v. Hamer, Docket No. 114496 (Oct. 18, 2013).
View the full Legal Alert
Down for the Count, But Not Out: Colorado’s Remote Retailer Reporting Requirements Expected to Be Challenged in State Court
Posted on
Posted in Digital Economy, Noteworthy Cases
By Saabir Kapoor and Andrew Appleby
After the U.S. Court of Appeals for the Tenth Circuit denied an en banc rehearing on October 1, 2013, the Direct Marketing Association (DMA) is expected to bring suit in Colorado District Court to challenge the constitutionality of the Colorado law that requires out-of-state retailers without a physical presence…
No COP for You! Indiana Rules Out-of-State Information Service Provider Cannot Use COP Sourcing Method
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Posted in Digital Economy, Noteworthy Cases
By Madison Barnett and Prentiss Willson
The Indiana Department of Revenue determined in a Letter of Finding that an out-of-state information service provider must apportion its receipts from sales to Indiana customers to Indiana in a market-sourcing-like manner, even though the majority of its costs were incurred outside Indiana. The taxpayer provided information services electronically…
Florida Trial Court Rejects Satellite Industry’s Discrimination Claims
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Posted in Digital Economy, Noteworthy Cases
By Zachary Atkins and Douglas Mo
A Florida trial court ruled that imposing different tax rates on cable and satellite television services did not violate the Commerce Clause or the Equal Protection Clause of the U.S. Constitution. The statute in question imposes a statewide communications services tax at a higher rate on satellite service than…