Shaking things up in state and local tax
Shaking things up in state and local tax
By Jessica Kerner and Pilar Mata
The Michigan Court of Claims held that cloud computing, or software as a service (SaaS), is a nontaxable service rather than a taxable use of prewritten software. The taxpayer, an insurance company, entered into various transactions that provided the taxpayer with remote access to third parties’ software. The Michigan…
By Stephanie Do and Andrew Appleby
The Indiana Department of Revenue determined that an out-of-state wireless communications equipment wholesaler’s in-state business activities were protected by P.L. 86-272, and therefore, the wholesaler did not have nexus for Indiana corporate income tax purposes. The wholesaler’s in-state activities were limited to shipping products to Indiana customers by common…
By Nicole Boutros and Pilar Mata
The Texas Comptroller determined that a taxpayer’s “digitizing” services provided to oil and gas industry clients were taxable data processing services for Texas sales and use tax purposes. The services at issue consisted of taking well log data from the client; analyzing, manipulating and interpreting such data; and providing…
By Zachary Atkins and Timothy Gustafson
The New Jersey Tax Court held that a mobile telecommunications service provider was not required to reimburse its customers before seeking a $32 million refund of erroneously collected sales tax. As part of a federal court-approved 2010 settlement agreement involving AT&T Mobility and its subsidiaries and affiliates, New…
By Maria Todorova and Andrew Appleby
In a Technical Memorandum, the New York State Department of Taxation and Finance explained the impact of the holding in Echostar, which addressed the New York sales and use tax resale exclusion for certain purchases made by satellite and cable television service providers. In Echostar, the…
By Todd Lard
While meeting in Denver this week, the MTC’s Income Tax Uniformity Subcommittee advanced two separate projects to develop industry-specific apportionment regulations. The first project will examine the sourcing of electricity. MTC staff presented research on how states source electricity for income tax purposes. The staff concluded that while 31 states treat electricity as…
By Zachary Atkins and Andrew Appleby
The New York Supreme Court, Appellate Division, affirmed a 2013 trial court ruling denying Sprint Nextel Corporation’s motion to dismiss the attorney general’s False Claims Act complaint. In a slip opinion, the Appellate Division concluded that N.Y. Tax Law § 1105(b)(2), which the state attorney general contends imposes tax…
By Sahang-Hee Hahn and Pilar Mata
The Texas Comptroller has amended its regulation governing the sales tax treatment of cable television services. The revised regulation defines for the first time several terms related to the cable television services industry; adopts a destination-based sourcing rule for intrastate sales of streaming video; and taxes “bundled cable services.&rdquo…
By Jessica Kerner and Charlie Kearns
The Massachusetts Department of Revenue determined that the sale of access to an online database was not subject to sales and use tax because the “object of the transaction” was nontaxable data processing services rather than taxable prewritten software. The taxpayer sells subscriptions to a website that allows purchasers…
By Mary Alexander and Timothy Gustafson
In an administrative order, the Oregon Department of Revenue (1) repealed a rule related to Oregon’s Multistate Tax Compact (MTC) statute, (2) changed the method for utility and telecommunication providers to elect a double-weighted sales factor and (3) provided instructions on the time to adjust a return based on…
