In Letter Ruling 22-02 (publicly released last week), the Tennessee Department of Revenue ruled that fees a marketplace facilitator charges for connecting buyers and sellers and processing payments are not subject to sales tax. The taxpayer in the ruling was a “delivery network company” under Tennessee law. It connects third-party sellers of tangible personal property
Digital Economy
Texas Comptroller rules online learning courses are nontaxable while teacher planning services are taxable data processing
By Jonathan Feldman, Alla Raykin & Jeremy Gove on
Posted in Digital Economy, Texas
The Texas Comptroller published a private letter ruling concluding that subscriptions to online learning courses for academic subjects, professional topics, and vocational topics are not taxable. However, a company’s subscriptions for the “teacher plan,” which provides teachers lesson plans and other capabilities to integrate into their classrooms, are taxable as data processing. None of the…
Washington issues interim statement regarding the taxability of NFTs
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
The Washington Department of Revenue issued an Interim Guidance Statement on the taxability of non-fungible tokens (NFTs). The guidance provides that the purchase of a standalone NFT is generally subject to sales tax as the sale of a digital product, and the seller of the NFT is also subject to the business and occupation (B&O)…
Account access services are taxable digital automated services in Washington
By Maria Todorova & Danyelle Dukes on
Posted in Digital Economy
The Washington Department of Revenue’s Administrative Review and Hearings Division recently ruled that a company’s account access services provided to credit unions constituted digital automated services subject to sales tax.
The taxpayer provided an online banking platform and an automated phone system to member credit unions, which in turn provided those services to their individual…
Pro tip: Maryland limits sales taxation of certain digital products
Posted in Digital Economy, Policy and Legislation
On July 1, 2022, the Maryland Comptroller of the Treasury revised its Business Tax Tip #29, to acknowledge the exclusion of certain business purchases of digital products. In addition, the revised guidance clarifies the taxability of data processing, information, web hosting, and digital advertising services. This is the Comptroller’s third set of revisions to…
Texas Comptroller rules cloud-based online platform educational services not subject to sales tax
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy, Texas
The Texas Comptroller recently published a private letter ruling (issued on June 10, 2022) concluding that access to a cloud-based online platform used by healthcare students while attending courses at accredited universities and colleges was not subject to sales tax. The platform was accessed exclusively via the Internet, and the students did not download any…
Washington provides sales tax exemption for urban data centers
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
The Washington Department of Revenue released a notice providing that effective June 9, 2022, qualifying businesses and tenants may apply for a sales and use tax exemption for purchases of server equipment and infrastructure for computer data centers located in urban areas pursuant to 2022 House Bill 1846. Eligible urban areas are those counties…
Out-of-state travel business subject to tax
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
The Wisconsin Tax Appeals Commission ruled that an out-of-state travel agent that used independent travel consultants in Wisconsin was doing business in Wisconsin and is responsible for the Wisconsin franchise tax. The company argued, among other things, that it was in the business of selling SaaS that did not produce income taxable in Wisconsin; however,…
Texas provides guidance on taxability of card management programs
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy, Texas
The Texas Comptroller recently released a private letter ruling (provided to the taxpayer on April 29, 2022) concluding that the taxpayer’s payment card management services are nontaxable in Texas. In the ruling, the taxpayer provides a payment card management program that allows services, such as food delivery services, the ability to apply customized spending limits…
Maryland alters statutory definition of “digital product”
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy, Policy and Legislation
Maryland H.B. 791 clarifies that the definition of “digital product” for sales and use tax purposes does not include certain digital inputs or enterprise software. Specifically, H.B. 791 excludes from taxable digital products the following: (i) products having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities where the purchaser has a copyright or similar…