Shaking things up in state and local tax
Shaking things up in state and local tax
The California Court of Appeal for the Third Appellate District held that the purchase of “discounted” cell phones bundled together with wireless services requires payment of sales tax based on the cell phone’s full price.
Plaintiffs purchased cell phones at a reduced cost, together with wireless services, in a “bundled transaction.” The bundled transaction included…
The Colorado Department of Revenue has determined that an information technology provider’s sale of its backup service, which allowed its customers to back up business applications, files, and systems, and also included the delivery of computer servers to customers’ locations, constituted a nontaxable service. Although the Department “considered whether the placement of [the] servers constitut[ed]…
The Texas Comptroller of Public Accounts issued a private letter ruling concluding that several services provided to optometrists and ophthalmologists were subject to sales tax as data processing. Specifically, the Comptroller determined that the taxpayer’s web-based software system, which doctors use to manage patient relationships, schedule appointments, refill prescriptions, and communicate about treatment, is a…
In this podcast, our state team discusses a Tennessee letter ruling concerning sales and use tax treatment of bundled transactions.
By Chelsea Marmor and Open Weaver Banks
The Appellate Court of Illinois reversed the Circuit Court’s $29.1 million Chicago Hotel Accommodations Tax (CHAT) award for Chicago holding that Defendant’s online facilitation and service fees were not subject to CHAT. CHAT applies to the “gross rental or leasing charge,” which was not defined during the years…
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…
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…
Applying the “true object” test to the taxpayer’s web-based services, the Tennessee Department of Revenue ruled that charges for granting access to the taxpayer’s website for purposes of obtaining information would not be subject to sales tax. While the access to web-based services is tax-exempt as a sale of…
