On January 12, 2023, the Louisiana Board of Tax Appeals held that sales of remote personal electronic storage capacity services were not subject to the New Orleans French Quarter Economic Development District sales and use tax. A federal statute, the Internet Tax Freedom Act, prohibits states and political subdivisions from imposing taxes on Internet access. Effective November 1, 2007, Congress expanded the ITFA’s definition of Internet access to include, among other items, “personal electronic storage capacity” that is provided independently or not packaged with Internet access. The taxpayer offers a service that allowed users, via an Internet connection, to upload their personal digital content to the taxpayer’s remote servers and access their personal digital content from any of their Internet-connected devices. The taxpayer provides the storage service at no cost, but also offers customers the option to pay a subscription fee for additional storage capacity. The Board held that under the plain meaning of the ITFA, the storage service provided subscribers with “personal electronic storage capacity.” Therefore, the storage service is Internet access and not taxable. The Board further noted that services are generally not taxable, unless specifically enumerated. The storage service was thus also not taxable because it was not specifically enumerated.

Apple Inc. v. Samuel, Dkt. No. L01283 (La. Bd. Tax App. Jan. 12, 2023).