Shaking things up in state and local tax
Shaking things up in state and local tax
In an official press release on September 30, 2026, Texas Comptroller Don Huffines announced that fees charged by marketplaces will no longer be subject to sales tax as data processing. This development is welcome news to marketplaces that were challenging the Comptroller’s prior controversial position.
Background
In 2025, the Comptroller overhauled its data processing regulation…
In Matter of NetVoyage Corp. aka NetDocuments.com, the New York State Tax Appeals Tribunal considered whether the company’s cloud-based document management platform constituted taxable prewritten computer software or a nontaxable document storage service. Following an audit of the company’s sales from June 2017 through November 2019, the Division of Taxation assessed additional sales tax…
The Maryland Supreme Court recently issued a decision holding that equipment used to transmit and distribute electricity to Maryland customers qualified for an exemption from sales and use tax as tangible personal property used “directly and predominantly in a production activity.” Tax-Gen. § 11-210(b)(1). While Maryland generally imposes sales and use tax on retail sales…
On August 26, 2026, the Missouri Department of Revenue issued a letter ruling concluding that “charges for providing medical records on a CD are not subject to Missouri sales tax.” The letter ruling applicant was in the business of retrieving, compiling, reproducing, and furnishing medical records. The applicant in some instances furnished the requested medical…
The Mississippi Court of Appeals reversed a summary judgment ruling in favor of the Mississippi Department of Revenue (DOR) in a case challenging a sales tax audit assessment. The Court of Appeals held that the taxpayer had presented sufficient evidence to create a genuine issue of material fact on the issues raised such that summary…
The Colorado Department of Revenue recently issued GIL 26-004, concluding that digitally delivered photographs and stand-alone licenses to use those photographs are subject to state sales tax. In the Department’s view, both transactions involve taxable transfers of interests in tangible personal property (“TPP”). The GIL applies Colorado’s digital goods statute to treat electronically stored…
In Tyson Chicken, Inc. v. Hudson, the Arkansas Supreme Court addressed whether rented wooden shipping pallets used to deliver chicken products qualify for the state’s sale for resale exemption. The court concluded they do not, affirming the circuit court’s grant of summary judgment in favor of the Department of Finance and Administration.
Three Tyson…
On remand from the Ohio Supreme Court, the Ohio Board of Tax Appeals (BTA) applied the true object test to determine whether charges paid by Cincinnati Federal Savings & Loan (Cincinnati Federal) to Fiserv constituted taxable automatic data processing (ADP) and electric information services (EIS), or nontaxable professional services. The Ohio Supreme Court had previously…
The Massachusetts Appellate Tax Board (ATB) held that an auto body repair shop owed sales tax on the full receipts from its repair services because it failed to separately state nontaxable labor charges from taxable tangible personal property costs, notwithstanding that the shop itself paid sales tax when purchasing the tangible personal property incorporated into…
The U.S. District Court for the Northern District of Illinois ruled that the National Bank Act (NBA) does not preempt Illinois’ Interchange Fee Prohibition Act (IFPA), which prohibits credit card and debit card transaction processors from charging interchange fees on the portion of any card transaction that includes state and local taxes and gratuities.
In…
