On October 24, 2025, the Tennessee Department of Revenue ruled that subscription fees for a mobile heart-health app were subject to sales and use tax. The taxpayer charged an annual flat per-user subscription fee to clients who make subscription offerings available as part of medical benefits to their employees and employees’ dependents. For the subscription fee, the taxpayer granted its clients (and the users) software licenses for access to the app, which tracked their blood pressure and activity.

Since 2015, remotely accessed computer software is subject to sales tax in Tennessee. However, sales tax does not apply to “information or data processing services,” nor subscriptions to data processing and information services, where the true object of the transaction is the processed data or information. Here, the Department ruled that the true object of the transaction was the sale of software rather than data processing services. The Department reasoned that tracking biometric data like blood pressure and other activity performed by the software in the app is not “data processing” because it was not converting raw data into a readable form that is processed by a computer.  Thus, the Department found that the subscription fees were taxable.

Tenn. Dep’t of Rev. Ltr. Rul. 25-08 (Oct. 24, 2025).

SALT Partner Jeff Friedman is pleased to speak at the 2025 NCSL Fiscal Institute Symposium, which brings together legislative fiscal leaders from across the country for an interactive program. During the program, Jeff will join the Tax Appeals panel.

In addition, SALT Partner Todd Betor is looking forward to speaking at the TEI New York Chapter’s 62nd Annual Symposium. During the full-day program, Todd will examine how the One Big Beautiful Bill Act is influencing the application of key federal, state and local corporate tax provisions, including:

  • Section 174 & new Section 174A – Research & Experimental (R&E) costs
  • Section 163(j) – Business interest expense limitation
  • Section 168(k) – Bonus depreciation

Find out more about this year’s event and register here.

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award a prize for the smartest (and fastest) participant.

This week’s question: Last week, Seattle voters overwhelmingly approved changes to which city-imposed tax?

E-mail your response to SALTonline@eversheds-sutherland.com.

The prize for the first response to today’s question is a $25 UBER Eats gift card. This week’s answer will be included in our SALT Shaker Weekly Digest, distributed on Saturday. Be sure to check back then!

In this episode of the SALT Shaker Podcast, host and SALT Counsel Jeremy Gove sits down with Partner Tim Gustafson to explore the historical evolution and current challenges surrounding California’s sales factor.

The conversation traces California’s apportionment journey from its original equally weighted three-factor formula to today’s dominant single sales factor approach. Jeremy and Tim unpack key developments, including:

  • California Supreme Court decisions shaping the definition of “gross receipts”
  • A voter-approved initiative accelerating the shift to a single sales factor
  • Regulatory amendments relating to market-based sourcing

The episode concludes with a discussion of a recent legislative change redefining “gross sales” as “net sales” – a retroactive adjustment now facing legal challenges for its conflict with prior judicial interpretations.

Plus, don’t miss the overrated/underrated segment, where Jeremy and Tim share their hot takes on card games.

For a deeper dive into this topic, check out Tim’s article, published in Tax Notes State, which he co-wrote with Associate Constance Chien.

For questions or comments, email SALTonline@eversheds-sutherland.com. Subscribe to receive regular updates hosted on the SALT Shaker blog.

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On November 13, SALT Partner Tim Gustafson looks forward to speaking at the 2025 California All-Tax Conference, presented by the California Lawyers Association. Tim’s session will provide the latest updates from the California Office of Tax Appeals, featuring a comprehensive year-in-review of key developments and opinions, insights into recent updates from the past year and a live Q&A with OTA staff.

Learn more and register here.

Meet Luna and Yordy, two lovable rescue pups who have brought plenty of personality (and a little bit of chaos!) to the home of Joe Moore, Vice President, Corporate Tax at Costco.

Luna, a two-year-old white Labrador, is a big, goofy sweetheart who likes to avoid tiny humans at all costs. Her family has learned to steer clear of parks and morning bus stops, but when it comes to hanging out with other dogs, she’s all in!

Yordy, a three-year-old shepherd mix, is the chiller member of the duo. That is, until a bunny or squirrel dares to cross his path – that’s when the chase begins!

Both pups have had their fair share of adventures, including a couple of great escapes. These days, they sport trackers on their collars, just in case curiosity gets the better of them again.

Training is ongoing (and often entertaining). Luna is still working through her feelings of being left alone in the house, and her humans have discovered that leaving a grocery bag on the counter is a surefire way to ease her anxiety without causing too much damage. She will grab the bag off the counter and shred it for comfort. 

Despite their quirks, Luna and Yordy are adorable and always ready for a cuddle at the end of the day.

Welcome to the SALT Pet of the Month family, Luna and Yordy!

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award a prize for the smartest (and fastest) participant.

This week’s question: Which state recently sued California alleging that the occasional sale rule applicable for purposes of apportioning corporate income is unconstitutional?

E-mail your response to SALTonline@eversheds-sutherland.com.

The prize for the first response to today’s question is a $25 UBER Eats gift card. This week’s answer will be included in our SALT Shaker Weekly Digest, distributed on Saturday. Be sure to check back then!

California adopted UDITPA in 1966, with its equally weighted three-factor formula for apportioning multistate income – property, payroll, and sales. Over time, however, the sales factor has emerged as the primary mechanism for determining tax liability in California.

Today, California’s sales factor is the same as it was nearly 60 years ago. Although the fraction itself may not have changed, its interpretation and application have evolved at the hands of the Legislature, the California Franchise Tax Board, and California courts. And that evolution continues apace.

In this installment of “A Pinch of SALT,” published by Tax Notes State, Eversheds Sutherland attorneys Tim Gustafson and Constance Chien provide a brief timeline of key California sales factor developments over the past 25 years and examine issues that will drive change for the next 25 years and beyond.

Read the full article here.

This week, SALT Partners Michele Borens and Charlie Kearns are pleased to present at the ETA Payments Compliance Conference, held November 5–6 in Pentagon City, VA. On Thursday, their session will focus on considerations for payments companies in light of changes to state sales tax laws.

For more information and to register, click here.

In addition, SALT Partners Jonathan Feldman and Scott Wright will share a SALT update at the 2025 Georgia Tax Forum, hosted by The Georgia Society of CPAs. Their presentation will highlight recent developments in state and local tax policy, litigation trends, and planning opportunities for Georgia-based businesses.

You can find more information here.

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award a prize for the smartest (and fastest) participant.

This week’s question: The mayor of which midwestern city included a new social media tax as part of the 2026 proposed budget?

E-mail your response to SALTonline@eversheds-sutherland.com.

The prize for the first response to today’s question is a $25 UBER Eats gift card. This week’s answer will be included in our SALT Shaker Weekly Digest, distributed on Saturday. Be sure to check back then!