Shaking things up in state and local tax
Shaking things up in state and local tax
SALT Partner Jeff Friedman is pleased to join the speaker lineup at this year’s Midwestern States Association of Tax Administrators (MSATA) Annual Meeting, taking place this week in Oklahoma City, OK. Jeff will present on the latest noteworthy and impactful developments in SALT.
Learn more about this year’s conference 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: Which state’s Department of Revenue recently finalized guidance on a 90% sales tax exemption for large computer purchases?
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!
On July 23, 2025, the Indiana Department of State Revenue issued Revenue Ruling # 2025-02-RST holding that generative artificial intelligence (AI) services accessed through web browsers or application programming interfaces are considered services and not subject to sales/use tax. The ruling involved a company headquartered outside of Indiana that provides advanced AI services to customers through a generative AI chatbot trained to respond to plain language prompts in a human-like manner, assisting with writing, analysis, coding and problem-solving.
In reaching its conclusion, the Department characterized the taxpayer’s offering as service and not a digital product, as defined. Indiana sales and use tax is imposed on products transferred electronically only if the products meet the definition of specified digital products, which are electronically transferred digital audio works, digital audiovisual works, or digital books. The Department also reaffirmed that Software as a Service (SaaS) is not taxable in Indiana, and charges for accessing prewritten computer software electronically via the internet where no permanent ownership interest, control or possession in the software is acquired are not subject to sales tax. Because the AI service is not a digital product, it is accessed electronically with no permanent ownership aspect, and customers have no permanent ownership of the chatbot, the Department concluded that the AI service is not subject to sales tax.
The ruling aligns with Indiana’s general approach of not taxing services unless specifically enumerated, and reinforces the state’s position that SaaS offerings accessed electronically without permanent ownership are not subject to sales tax.
Revenue Ruling # 2025-02-RST, Indiana Department of State Revenue (July 23, 2025).
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 Streamlined Sales Tax Governing Board recently released a report announcing that which state will be back in compliance with the Streamlined Sales and Use Tax Agreement beginning in October?
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!
The Pennsylvania Commonwealth Court found that while a three-year statute of limitations generally governs the time for taxpayers to file a refund, a separate, more specific statute of limitations applies when a corporate taxpayer’s request for a refund is precipitated by a change to taxable income made by the IRS. The Court explained that the more specific statute of limitations provision prevails because it is an exception to the general rule. Accordingly, the Court overruled the Pennsylvania Board of Appeals and the Board of Finance and Revenue’s decision that the taxpayer’s refund request was untimely. However, the Court remanded the case to the Board of Finance and Revenue to determine the appropriate definition for “taxable income” that would trigger the Department to adjust its records and confirm to the revised tax.
This week, SALT Partner Jeff Friedman will speak at the 2025 Northeastern States Tax Officials Association (NESTOA) Annual Conference, held in Philadelphia, PA.
Jeff will help present New Developments in the SALT Mine, a session highlighting the latest interesting and significant SALT cases and developments.
To learn more about this year’s NESTOA Annual Conference, visit this link.
There was a great deal of activity in New York in the second quarter of 2025, including several new cases and decisions concerning state and local taxes affecting taxpayers in New York State and New York City.
In this installment of NY Tax Talk, a quarterly column in Law360 focused on recent developments in New York tax law, Eversheds Sutherland attorneys Liz Cha and Daniel Hopper focus on two issues showcasing the interplay between state and local taxes and federal law, as well as a few key tax-related political developments.
Read the full article here.
The Texas Comptroller issued a private letter ruling on June 3, 2025, addressing whether the selling of bitcoin is “either the sale of tangible personal property (TPP) or the sale of a security” for Texas franchise tax purposes. The taxpayer requesting the guidance, a qualified S corporation for federal purposes, acquires bitcoin and resells the bitcoin to its customers in exchange for cash at ATMs. The Comptroller concluded that because bitcoin is a cryptocurrency and digital asset/digital token, bitcoin is intangible property, not tangible personal property. Because bitcoin is intangible property, the taxpayer cannot use its costs from acquiring the bitcoin in its cost of goods sold deduction when determining its franchise tax liability. The Comptroller also concluded that bitcoin does not qualify under the franchise tax’s definition of “security,” nor is it a “currency” to either the IRS or the Texas Department of Banking.
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: A recently introduced bill in New York proposes a 0.2% tax on which type of transactions?
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!
Is this the year for updated conformity? Will FTB and CDTFA finalize long-awaited regulatory amendments? What key tax cases are pending in California courts and what hangs in the balance?
On August 20, join Eversheds Sutherland attorneys Tim Gustafson and Eric Coffill as they try and answer these questions and more in this California tax development webinar.
There’s still time to register here.
