Digital Economy

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On October 31, 2022, the Illinois Department of Revenue released new guidance providing clarity on the treatment of cryptocurrency. The Department’s guidance provides that Illinois conforms to the federal tax treatment of treating cryptocurrency as property. The new guidance also states that, for purposes of the applicability of Public Law 86-272 to an out-of-state company…

The Administrative Review and Hearings Division of the Washington Department of Revenue recently issued Determination No. 21-0055 in which it determined receipts from the provision of genealogy services should be apportioned based on the customer location for purposes of the Business and Occupation Tax. The genealogy company performs research, primarily online, investigating the customer’s ancestry,…

On October 15, 2022, the Utah State Tax Commission published a proposed amendment to its rule governing the taxation of custom software for sales and use tax purposes, clarifying that the sale, rental or lease of custom computer software constitutes a sale of personal services that is not subject to tax, regardless of the form…

On October 6, 2022, the Supreme Court of Mississippi held that digital images are not subject to sales tax as tangible personal property or specified digital products. The taxpayer was a digital wedding photographer that sold wedding photography services to customers and then transferred the digital images to the customers via DVDs or flash drives.

The Iowa Department of Revenue proposed amendments to its sales and use tax regulations regarding digital-based services implementing 2018 legislation imposing sales tax on a variety of new, digital-based services. The Department essentially adopted its prior non-binding guidance regarding which services are taxable, including storage of tangible or electronic files, information services, video game services…

On September 29, 2022, the New York State Division of Tax Appeals determined that services involving the creation of customer engagement reports based on email tracking and email template usage data are nontaxable information services—particularly when use of software is only incidental to the performance of such services. The taxpayer sold “customer engagement services” to…

The Taxation of Remote and Internet-Based Computer Software Products and Services Study Committee (the “Committee”) was empaneled by the Mississippi Legislature to examine and develop recommendations regarding the taxation of remote and internet-based computer software products and services following the Mississippi Department of Revenue’s (“DOR”) proposal in September 2021 to update its regulations. The proposed…

On August 10, 2022, the New York State Department of Economic Development issued emergency regulations to implement the state’s Digital Gaming Media Production Tax Credit Program. The legislature enacted the program to encourage, attract, and grow the digital game development industry in New York State. The purpose of the tax incentive, which was included in …

On July 1, 2022, a statewide 27 cent per sale delivery fee took effect in Colorado. The fee applies to retailers or marketplace facilitators that collect sales or use tax on the sale of tangible personal property that is sold and delivered (including delivery performed by a third party) to a purchaser in Colorado. The…

Pennsylvania recently codified the state’s corporate income tax economic nexus threshold, making corporations with no physical presence in Pennsylvania responsible for corporate income tax if they have sales of $500,000 or more per year sourced to Pennsylvania for tax years beginning after December 31, 2022. The legislation also includes a non-exhaustive list of other nexus…