Shaking things up in state and local tax
Shaking things up in state and local tax
By Derek Takehara and Andrew Appleby
The Oklahoma Tax Commission issued three Letter Rulings addressing the digital economy. First, the Commission ruled that receipts from sales of digital photos, videos and designs delivered via the Internet are not subject to sales tax when no tangible item is conveyed. The Commission also ruled that charges for…
By Madison Barnett and Jonathan Feldman
The Illinois Supreme Court held that Illinois’ local Retailers’ Occupation Tax (ROT) sourcing regulations—which applied a bright-line test to assign sales to the location where the purchase order was accepted—were not supported by the controlling tax imposition statutes and thus were invalid. The taxpayer, like many others in Illinois, established…
By Sahang-Hee Hahn and Timothy Gustafson
Less than two months after Massachusetts enacted a tax on computer design and software services (Tech Tax), the legislation was repealed with the passage of House Bill (HB) 3662 (for Sutherland’s previous coverage of this development, click here). The Tech Tax expanded Massachusetts’s sales and use tax…
By Maria Todorova and Prentiss Willson
The Minnesota Tax Court held that computer software consulting and implementation services were not subject to sales tax in Minnesota. The taxpayer, SAP Retail, Inc., licensed enterprise resource planning software. It also provided consultation and implementation services to configure the software to a customer’s particular business activities. The court…
By Jessica Kerner and Timothy Gustafson
The Tennessee Department of Revenue determined in a Letter Ruling that a taxpayer’s sale of remote storage services and virtual computing services are not subject to Tennessee sales or use tax where the data centers and servers used to provide such services are located outside the state. The…
By Mary Alexander and Andrew Appleby
The Tennessee Court of Appeals held a wide area network (WAN) service provided by IBM was not taxable because the true object of the service was not a “telecommunications service.” IBM’s WAN service was a technological infrastructure that enabled remote access to information by linking geographically separated computers. The…
By Saabir Kapoor and Andrew Appleby
After the U.S. Court of Appeals for the Tenth Circuit denied an en banc rehearing on October 1, 2013, the Direct Marketing Association (DMA) is expected to bring suit in Colorado District Court to challenge the constitutionality of the Colorado law that requires out-of-state retailers without a physical presence…
By Shane Lord and Timothy Gustafson
The Tennessee Court of Appeals held that a taxpayer’s wholesale service of converting end-user information into Internet protocol was an “enhanced” service for which the true object or primary purpose was to provide the non-taxable service of “Internet access” and not the taxable service of “telecommunications.” Adopting definitions set forth…
By Saabir Kapoor and Timothy Gustafson
Texas has clarified the Comptroller’s authority to disregard certain retail business locations in determining the situs of a sale for local sales tax purposes. Current law requires retailers to collect and remit local sales tax based on the ship-from location on all delivery sales of taxable items that are…
By David Pope and Prentiss Willson
The New Jersey Division of Taxation concluded in a technical bulletin that sales of cloud computing services are not subject to sales and use tax in New Jersey. Although this is not a change to the Division’s position, the bulletin specifically identifies software as a service (SaaS), platform as…
