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In two reletter rulings, the Texas Comptroller’s office evaluated the sales and use taxability of certain unique web-based services. In Tex. Policy Letter Ruling 201207531L (July 31, 2012), the Comptroller’s office ruled that Internet marketplace listing fees were not subject to Texas sales and use tax; however, the provision of webstore development services were taxable data processing services.Continue Reading The Lone Star State Swings the Lasso Around E-Commerce Services

While most states that have “click-through nexus” sales tax laws have issued little to no guidance addressing the scope of their provisions, the Pennsylvania Department of Revenue (Department) issued guidance explaining the types of payment mechanisms that will trigger nexus.

The Department’s ruling supplements a December 1, 2011 Tax Bulletin (Tax Bull. 2011-01)…

The Indiana Supreme Court issued another taxpayer-averse decision, holding that Miller Brewing Company’s sales to Indiana customers are considered Indiana sales even if they are picked up out of state and delivered into Indiana by common carrier. The Indiana Supreme Court reversed the Indiana Tax Court, which relied on an administrative rule example to exclude…

On March 22, 2012, Utah Governor Gary Herbert signed House Bill 384 (2012) into law, expanding the types of companies that are required to collect and remit Utah sales and use tax. HB 384 requires sellers that hold “substantial ownership interests” in certain “related sellers” to collect and remit Utah sales and use tax. Today, the Utah State Tax Commission released guidance on how to determine whether a business entity’s activities trigger the state’s new affiliate nexus law. The new nexus regulations go into effect on July 1, 2012.

The new affiliate nexus law, Utah Code Ann. § 59-12-107(2)(b), treats a seller as if it is selling tangible personal property, a service, or a product transferred electronically for use in Utah and will be required to collect and remit sales and use taxes if:Continue Reading Utah Quietly Expands Affiliate Nexus Statute

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?