The Virginia Department of Taxation (Department) ruled that a company’s sales of cloud computing services did not create nexus with Virginia for corporate income tax purposes. The Department also said that in applying P.L. 86-272, it uses the same “solicitation” test for both the sales of intangible personal property
Southeast
Taxing the Internet Media Stream – South Carolina Determines Streaming Media Charges Are Taxable
By Robert Merten and Madison Barnett
The South Carolina Department of Revenue issued a revenue ruling concluding that charges paid by customers to stream media content over the Internet, such as movies, music and television programs, are subject to state sales and use tax. Under South Carolina law, the statutory definition of “tangible personal property&rdquo…
Keep It in the Family: North Carolina Appellate Court Finds Taxation of Trust Violates Due Process
By Ted Friedman and Madison Barnett
The North Carolina Court of Appeals held that it would violate Due Process to impose income tax on an out-of-state inter vivos trust because the trust lacked a sufficient connection with North Carolina. The trust was created and governed by laws outside of North Carolina, the Trustee resided outside…
Software + Services = No Tax: Bundles of Electronically-Transferred Software and Related Services Not Subject to Georgia Sales and Use Tax
By Nick Kump and Marc Simonetti
The Georgia Department of Revenue (Department) released a letter ruling stating that a taxpayer’s sales of computer software and related services were not subject to sales and use tax. The taxpayer sold bundled packages for a single price that included electronically transferred computer software with corresponding updates and upgrades…
Alabama Regulation Requires Software Update: Tax Tribunal Holds Modified Software Is Nontaxable Custom Software
By Hanish Patel and Eric Coffill
The Alabama Tax Tribunal held that a taxpayer was entitled to a refund of sales taxes paid on purchases of software that was modified for its exclusive use because it constituted nontaxable custom software. Relying on its regulation, the Alabama Department of Revenue (DOR) denied the refund, stating the…
South By Southwest: Texas Supreme Court Rejects Processing Exemptions for Oil Company
By Charles Capouet and Todd Lard
The Supreme Court of Texas held that an oil and gas exploration and production company’s purchases of casing, tubing, other well equipment, and associated services were not exempt from sales tax under various processing exemptions. Texas provides multiple exemptions from sales tax for certain tangible personal property related to…
There’s Something in the Water: Arkansas Denies Manufacturing Exemption to Equipment Used at Water Treatment Facility
By Stephen Burroughs and Scott Wright
The Supreme Court of Arkansas recently upheld use tax assessments imposed upon a contractor that purchased and installed equipment used in a water treatment facility expansion. Arkansas exempts from sales and use tax purchases of machinery and equipment used to create or expand a manufacturing or processing facility in…
Signals Crossed: Satellite TV Receipts Sourced to South Carolina Based on Subscriber Location
By Mike Kerman and Andrew Appleby
The South Carolina Administrative Law Court determined that a satellite television provider must source its subscription receipts to South Carolina based on the percentage of in-state subscribers. The administrative law judge (ALJ) determined that South Carolina is not a “strict” costs of performance state for apportionment purposes because its…
Purposeful By-Product: Louisiana Supreme Court Determines Purchases of Limestone Used in Electricity Generation Qualified for ‘Further Processing Exclusion’ Under Louisiana Sales & Use Tax
By Marc Simonetti and Douglas Upton
The Louisiana Supreme Court concluded that limestone purchased for the dual purpose of absorbing sulfur during the generation of electricity and producing ash for sale to third parties was excluded from the definition of a “sale at retail” by application of the “further processing exclusion” under the Louisiana sales…
Here’s the Deal: Georgia Governor Signs Several Significant Tax Bills
Georgia Governor Nathan Deal has signed into law several significant tax bills, affecting various Georgia tax matters, including sales and use taxes, property taxes, corporate income taxes and state tax credits, which:
- Adjust Georgia’s statutory interest rates applicable for both assessments and refunds for all tax types, as well as create new procedural requirements for
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