A New York Division of Tax Appeals administrative law judge determined that a California-based company’s sale of memberships to access its online medical technology platform was the provision of a nontaxable service rather than a taxable sale of prewritten software. The company offered membership-based “care navigation services” to patients of physician-owned medical practices through a web portal and a mobile device application, providing various services such as: medical provider selection; referral management; billing and insurance assistance; and access to medical records through a web portal and a mobile application, among others. While agreeing that the care navigation services were nontaxable, the Department of Taxation and Finance nevertheless asserted that the membership fees constituted receipts from sales of software because the memberships gave access to and the right to use the company’s software. The ALJ disagreed, concluding that the primary function of the membership was receiving care navigation services, which were not enumerated as subject to tax. The ALJ held that using software as one means of delivery was insufficient to characterize the overall service as the taxable sale of software. Finally, the ALJ noted that the Department’s assessment did not violate the Internet Tax Freedom Act because the Department was “taxing the prewritten software used in offering [the care navigation] services, as it would if the prewritten computer software was sold by other means.”

Matter of 1Life Healthcare, Inc., DTA No. 829434 (Div. Tax App., Nov. 10, 2021).

On December 1, Eversheds Sutherland Partner Nikki Dobay will present a multistate tax update for the Associated Taxpayers of Idaho during its 2021 ATI Taxpayers Conference.

In addition, Eversheds Sutherland Partner Jeff Friedman will present Hot Topics in Multistate Taxation for the North Carolina Bar Association on December 2.

Finally, Eversheds Sutherland is a sponsor of COST’s Pacific Northwest Regional State Tax Webinar on December 2. Speakers and topics include:

  • Partners Michele Borens and Jeff Friedman – Discussion of State Tax Cases, Issues & Policy Matters to Watch
  • Partner Jeff Friedman – What’s New at the Washington Department of Revenue

View and learn more about past and upcoming events and presentations for the SALT team.

Currently, there is no California conformity to GILTI, and GILTI is not part of the tax law in California unless and until the California Legislature adopts it.

In this column for the November/December issue of Journal of Multistate Taxation and Incentives, Eversheds Sutherland attorneys Eric Coffill and Annie Rothschild discuss the California Legislature’s recent effort to conform to GILTI, which failed, and why future attempts should be rejected.

Cuter than any star in the sky, meet Luna, our November Pet of the Month!

Belonging to Eversheds Sutherland Partner Jonathan Feldman, Luna the mini Goldendoodle joined the Feldman tribe during Hanukkah last year. Jonathan’s daughter, Anna, chose Luna’s name from the Harry Potter series, naming her after the character Luna Lovegood.

Luna enjoys car rides to Starbucks, and snacking on cheese. She has also been known to steal socks from the dryer, but with a face that adorable, who could blame her?

Take a look below at throwback pictures of sweet Luna, showing off how cute she was at 12 weeks old.

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

 

 

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

We will award prizes for the smartest (and fastest) participants.

This week’s question: Which state’s Department of Revenue recently issued guidance to remote sellers providing that while a remote seller is not required to collect tax on its first $100,000 in sales for purposes of determining when economic nexus first begins, remote sellers should advise purchasers they have a use tax obligation if no tax is collected on the sale?

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.

Answers will be posted on Saturdays in our SALT Shaker Weekly Digest. Be sure to check back then!

In a recently published private letter ruling, the Kentucky Department of Revenue concluded that a taxpayer’s service via a Software as a Service (SaaS) model was not a transfer or sale of tangible personal property, and therefore not a taxable transaction. The taxpayer in the ruling charged for access and use of its web-based software, which also included a free downloadable application to enhance the SaaS product. The ruling stated even though the optional application is a pre-written software component, it is offered for free and is a de minimis portion of the offering, and therefore does not convert the SaaS product into a taxable bundled transaction.

In this episode of the SALT Shaker Podcast policy series, host and Eversheds Sutherland Partner Nikki Dobay welcomes Jared Walczak, Vice President of State Projects at the Tax Foundation.

Jared begins the conversation by providing background on the work of the Tax Foundation, as well as his role within the organization.

He then shares his perspective about state tax revenues during the pandemic and beyond. Jared also discusses how the economic situations have informed the organization’s work of the past year and how that is likely to differ from what he expects to focus on in 2022. Jared and Nikki also touch on the Build Back Better Act.

Then, they wrap up with Nikki’s surprise non-tax question, this time focused on travel – what’s your favorite thing to do when visiting a new state on a work trip?

The Eversheds Sutherland State and Local Tax team has been engaged in state tax policy work for years, tracking tax legislation, helping clients gauge the impact of various proposals, drafting talking points and rewriting legislation. Partner Nikki Dobay, who has an extensive background in tax policy, hosts this series, which is focused on state and local tax policy issues.

Questions or comments? Email SALTonline@eversheds-sutherland.com.

 

 

 

 

 

 

 

 

 

 

 

 

 

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The Ohio Department of Taxation recently issued an FAQ addressing the gross receipts calculation regarding remote sellers’ registration and tax remittance requirements. Following South Dakota v. Wayfair, Ohio required remote sellers to register with the Department and begin collecting sales tax if the seller had greater than $100,000 in gross receipts or at least 200 transactions in either the current or previous calendar year. The FAQ reminds taxpayers that for purposes of calculating the $100,000 economic nexus threshold, gross receipts only includes receipts from retail sales. Thus, while receipts from enumerated services are used when determining the economic nexus threshold, receipts from non-enumerated services and receipts from sales for resale also do not count toward a taxpayer meeting the $100,000 threshold, but the FAQ does not address whether sales for resale count toward the 200 transaction threshold.

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

We will award prizes for the smartest (and fastest) participants.

This week’s question: On a recent SALT Shaker Podcast, Partner Nikki Dobay discussed a recently-introduced ballot initiative in which state?

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.

Answers will be posted on Saturdays in our SALT Shaker Weekly Digest. Be sure to check back then!

This week, Eversheds Sutherland is a proud sponsor of the virtual New England State and Local Tax Forum. Partner Breen Schiller will cover key issues facing combined filers in 2021.

In addition, Partner Jeff Friedman will present a virtual multistate tax update during the New Jersey Society of Certified Public Accountants Multistate Tax Conference on November 19, addressing the most significant state and local tax litigation and legislation that has taken place across the nation in the past year affecting income, sales and use, and business activity taxes.

View and learn more about past and upcoming events and presentations for the SALT team.