In Part I of their series for State Tax Notes, Sutherland attorneys Leah Robinson and Evan M. Hamme provided a roadmap describing how to challenge a department of revenue’s assertion that online services are taxable as licenses of software. While focused on New York audits, the roadmap can assist in any similar audit.
In Part II, Leah and Evan provide a chart detailing every New York Department of Taxation and Finance advisory opinion addressing online services since 2008, when the Department started taking the taxable-as-TPP position. The chart shows that while the Department’s approach has evolved, taxability determinations remain somewhat unpredictable. However, the three factors discussed in Part I of the series often tip the scales in favor of non-taxability.
View the full article, reprinted from the September 21, 2015, issue of State Tax Notes.