The Utah State Tax Commission ruled that sales to financial institutions in Utah of the right to use online banking software, finance and budget tool software, online bill payment software, mobile banking software, and a mobile banking application are sales of tangible personal property subject to Utah sales and
software
Michigan’s New Year Resolution: Refund Opportunities Associated with Electronically Accessed Software and Certain Online Services
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The Michigan Department of Treasury issued a Notice announcing that it will no longer impose sales or use tax on certain prewritten computer software accessed electronically and associated online services. The Notice comes on the heels of the Michigan Court of Appeals decision in Auto-Owners Insurance Company v. Department of Treasury and the Michigan Supreme …
Code Control: Michigan Court of Appeals Holds Contracts Allowing Access to Online Databases, Remote Access Software and Related Services Are Not Subject to Use Tax
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Posted in Digital Economy
By Nick Kump and Charlie Kearns
On October 27, the Michigan Court of Appeals affirmed the trial court’s decision in favor of the taxpayer and held that several contracts for data processing services, access to computer programs and databases, and other online services did not include the use of taxable prewritten computer software. After considering…
Are Your Software Keys Delivered the Old Fashioned Way? Iowa DOR Declares Tangible Digital Software Keys Exempt from Sales Tax
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Posted in Digital Economy, Policy and Legislation
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…
Bad Day for California as TTA Sales Tax Exemption for Software Is Broadly Reaffirmed by Appellate Court – Will Taxpayer Refund Claims Now Move?
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Posted in California, Noteworthy Cases
In a significant rebuff of the California State Board of Equalization (BOE), the California Second District Court of Appeal held that a manufacturer’s sale of software on tangible media was exempt from sales tax under the technology transfer agreement (TTA) statutes. Lucent Technologies, Inc. v. State Bd. of Equalization, No. B257808, 2015 WL 5862533.
In A New York Minute: How to Defend a Remote Access to Software Sales Tax Audit, Part II
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Posted in New York
In Part I of their series for State Tax Notes, Sutherland attorneys Leah Robinson and Evan M. Hamme provided a roadmap describing how to challenge a department of revenue’s assertion that online services are taxable as licenses of software. While focused on New York audits, the roadmap can assist in any similar audit.
In Part…
Going Nowhere: Taxpayer Must Show Out-of-State Use of Software Licenses for Use Tax Exemption
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Posted in Policy and Legislation
By Mike Kerman and Charlie Kearns
The Indiana Department of Revenue (Department) found that a medical research company that purchased software licenses was entitled to an exemption from use tax for purchases of taxable computer software as long as it could show the licenses were ultimately used outside of Indiana. The Department added that an…
“Show Me” Software Taxation: Missouri Department of Revenue Issues Letter Ruling on Various Software Transactions
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Posted in Policy and Legislation
By Robert Merten and Charlie Kearns
The Missouri Department of Revenue has issued a comprehensive letter ruling answering 12 software-related sales tax questions on issues concerning canned software, custom software, software licenses, software invoices, software installation and software maintenance agreements. Missouri Department of Revenue LR 7615, Aug. 21, 2015. In the letter ruling, the…
A Pinch of SALT: All Hat and No Cattle or Meaningful Texas Tax Relief?
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Posted in Policy and Legislation
In his State of the State address at the beginning of the year, Texas Governor Greg Abbott tasked the Legislature with enacting meaningful business tax relief. The Legislature responded by reducing the franchise (also called the margin) tax rate and creating new exemptions and incentives for sales tax. At the same time, however, the Legislature…
In A New York Minute: How to Defend a Remote Access to Software Sales Tax Audit, Part I
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Posted in New York
Since late 2008, the New York State Department of Taxation and Finance has routinely taken the position that charges for application service provider services, software as a service, or other online services may be subject to New York sales tax as licenses of software. Some sellers began collecting sales tax on this basis, and the…