In this episode of the SALT Shaker Podcast, host Chris Lee discusses four recent developments, which includes a New York State advisory opinion addressing the taxation of email services (TSB-A-20(30)S, July 14, 2020), an Iowa publication addressing the taxability of computer peripherals, a Rhode Island rule concerning the taxability of online hosted software related to

The Iowa Department of Revenue issued a bulletin explaining its sales tax exemption for purchases of computers, along with the recently-enacted exemption for purchases of computer peripherals. The exemption applies to computers and computer peripherals used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise. The guidance

Effective July 1, 2020, Iowa law permits utility companies to utilize an inflow-outflow billing method for eligible distributed generation facilities. Under the inflow-outflow method, a generation customer is responsible for paying for the inflow kWh energy charge (sales to customer), while the amount of outflow kWh energy charge is credited to the customer (purchases from

By Nick Kump and Charlie Kearns

The Iowa Department of Revenue issued a policy letter declaring that the delivery of a digital software key on a tangible card is exempt from sales tax, as long as the software itself is delivered digitally and there is not a separate charge for the key. Iowa Code section

Yesterday, the Multistate Tax Commission kicked off its annual conference and committee meetings with meetings of the Audit and Nexus Committees. The MTC’s Audit program continues to grow by adding Iowa, Pennsylvania, Rhode Island and Delaware to the program during the last fiscal year. The MTC Nexus Committee is responsible for administering the National Nexus

By Zachary Atkins and Timothy Gustafson

The Iowa Supreme Court passed on an opportunity to breathe life into equal protection jurisprudence and, instead, rejected Qwest Corporation’s challenge under the Iowa Constitution to a property tax regime that taxes the personal property of incumbent local exchange carriers (ILECs) but not competitive long distance telephone companies (CLDTCs)

Fees masquerading as taxes have become increasingly common. And, as illustrated by the Iowa Supreme Court’s recent decision in Kragnes v. City of Des Moines, Docket No. 09-1473 (Mar. 2, 2012), in some cases all or part of a fee may constitute an illegal exaction to the extent it is deemed to be a tax. In Kragnes, the Iowa Supreme Court affirmed the district court’s holding that municipal franchise fees imposed on gas and electric services for almost 10 years exceeded the city’s reasonable costs of regulating the gas and electric franchises and, thus, the difference between the tax collected by the city and the city’s reasonable costs constituted an illegal tax.


Continue Reading City of Des Moines and Residents in ROW over Franchise Fees

Iowa and Kansas recently issued rulings regarding the taxability of cloud-based software applications and online training services. While the conclusions reached by both states—that the services are not taxable—are generally the same, the reasoning relied upon by each department of revenue illustrates the ongoing uncertainty of applying state sales and use tax laws to cloud computing services.

The Iowa Department of Revenue (IDOR) looked to the state’s statutory authority and acknowledged that the taxability of “cloud computing has not been expressly addressed by the Iowa Code.” Nonetheless, the IDOR determined that the sale of hosted software is not taxable because the Iowa Code provides that a “taxable ‘sale’ of tangible personal property does not occur if the substance of the transaction is delivered to the purchaser digitally, electronically, or by utilizing cable, radio waves, microwaves, satellites, or fiber optics.” I.C. § 423.3(67). Likewise, the IDOR considered web-based training to be nontaxable because “software training” is not an enumerated service under the Iowa Code.


Continue Reading Iowa and Kansas: Remote Access to Software is Not Taxable . . . Or Is It?