In this episode of the SALT Shaker Podcast, host Chris Lee reviews an Arkansas determination that rent-to-own leases are subject to the short term rental tax, a Texas holding that a taxpayer’s refund claims fulfill the notice requirements, a California denial of a taxpayer’s refund claim for failing to exhaust the administrative remedies and a
North Carolina
North Carolina Department of Revenue rules SaaS not subject to sales tax
By Jonathan Feldman, Charles Capouet & Chris Lee on
Posted in Digital Economy
The North Carolina Department of Revenue issued a private letter ruling, concluding that subscription fees for a Software as a Service (SaaS) product are non-taxable. The taxpayer licenses a cloud-based SaaS platform for customer engagement and marketing, which customers access via the Internet. The taxpayer charges customers a subscription fee for monthly access. The…
North Carolina Department of Revenue issues ruling that Software as a Service product is not taxable
By Jonathan Feldman, Chris Lee & Charles Capouet on
Posted in Digital Economy
The North Carolina Department of Revenue released a private letter ruling, concluding that a web-based product used to handle administration, management, and record-keeping via a Software as a Service model was not subject to sales and use tax. Consumers accessed the software application, which was running on a cloud-based infrastructure. The ruling states: “North…
North Carolina Department of Revenue confirms IT services subject to sales tax
By Eversheds Sutherland SALT on
Posted in In the News
In Private Letter Ruling 2020-14, the North Carolina Department of Revenue determined that an information technology company’s managed services – maintaining and monitoring its clients’ network equipment and software – were subject to sales and use tax. The taxpayer’s Terms of Use, which sets the scope of its services, qualified as a taxable service
North Carolina issues summary of 2020 sales and use tax changes
By Eversheds Sutherland SALT on
Posted in In the News
The North Carolina Department of Revenue issued its annual overview of this year’s legislative changes to sales and use taxes that affect various products and services, such as digital goods, marketplaces, and marketplace-facilitated sales.
North Carolina Extends and Clarifies Sales Tax Rules
By Jonathan Feldman on
Posted in Marketplace
On June 30, the North Carolina Governor signed into law a wide-ranging tax bill that includes marketplace facilitator rules for meals taxes and clarifies sales tax for download codes. HB 1080 extends marketplace facilitator collection and remittance obligations to local meals taxes, effective July 1, 2020. In addition, the law clarifies that the sale of…
Pump the Brakes: North Carolina Supreme Court Determines that Brake-Pad Manufacturer Does Not Qualify for Special Apportionment Rule for Public Utilities
By Michael Kerman & Eric Tresh on
Posted in Noteworthy Cases
The North Carolina Supreme Court affirmed a lower court decision that held that a manufacturer of brake pads used by railroads did not qualify for an exception to the state’s standard three-factor apportionment formula that allows “public utilities” to instead apportion their income using a single-sales factor formula.
In February 2019, the North Carolina Superior…
North Carolina Excludes Sales of Certain Digital Goods from Sales and Use Taxes
By Jonathan Feldman on
Posted in Digital Economy
On June 5, 2020, Governor Cooper signed HB 1079, which will exclude sales of certain digital audio and visual works from the state’s sales and use tax, and make other tax changes. The law exempts sales of digital educational services and the sales of digital audio or digital audiovisual works that consist of nontaxable…
North Carolina Legislature Approves Sales and Use Tax Exclusion for Digital Educational Services
By Jonathan Feldman on
Posted in Digital Economy
North Carolina HB 1079, providing a variety of sales tax changes, has been approved by both houses of the legislature and now awaits the Governor’s signature. In particular, the bill would exclude from sales and use tax sales of digital educational services and would exempt: (1) sales to home school operators of digital audio…
Proposed Legislation in North Carolina May Mitigate Tax on State Incentives
By Hanish Patel & Charlie Kearns on
Posted in In the News
The North Carolina legislature has introduced S.B. 622, which would make significant changes to a wide range of North Carolina taxes.
Among those changes, the legislation would allow a deduction, to the extent included in federal taxable income, for amounts received from specified economic incentive programs in North Carolina—the Job Maintenance and Capital Development…