The Michigan Supreme Court held that an electric utility’s transmission and distribution equipment used for both taxable and exempt purposes qualifies for a partial sales and use tax exemption. See Detroit Edison Co. v. Dept. of Treasury, No. 148753 (Mich. July 22, 2015). This marks the latest in a line of cases addressing whether
tangible property
All Sales Final: Indiana Merchandise Return and Coupon Creation Services Not Taxable
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Posted in Policy and Legislation
By Charles C. Capouet and Madison J. Barnett
The Indiana Department of Revenue determined that a taxpayer’s sales of merchandise return-related services to retailers are not subject to Indiana sales and use tax. The Department addressed the taxability of three services: (1) the Merchandise Authorization Service (MAS), which utilizes the taxpayer’s proprietary database and risk-scoring…
Software Training Not Subject to Indiana Sales and Use Tax
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By Charles C. Capouet and Andrew D. Appleby
The Indiana Department of Revenue found that software training is not subject to sales and use tax because it does not constitute tangible personal property. The Department audited the taxpayer and assessed additional use tax on its purchase of a software license agreement. Nearly half of the…
Missouri DOR Gets Trained: Gym Rental Fees Not Subject to Sales Tax
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Posted in Noteworthy Cases
By Jessie Eisenmenger and Timothy Gustafson
The Missouri Supreme Court held that charges paid by a personal training company to a gym for the rental of office space and limited use of the fitness equipment when conducting personal training sessions are not subject to sales tax. The personal training company paid the gym $6,000 per…
Constitutional Challenges to Ohio CAT’s Bright-Line Presence Nexus Test Advance
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Posted in Digital Economy
By Stephanie Do and Madison Barnett
The Ohio Board of Tax Appeals determined that two out-of-state online retailers with no physical presence in Ohio were subject to Ohio’s Commercial Activity Tax (CAT). The Board, declining to rule on the taxpayers’ constitutional arguments, found that the online retailers met Ohio’s statutory bright-line presence nexus test based…
Alabama DOR Proposes to Expand Rental Tax to Digital Transmissions and Multi-Purpose Cable Boxes
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By Charles Capouet and Open Weaver Banks
The Alabama Department of Revenue has proposed an amendment to the state’s rental tax regulation. If finalized, the regulation would tax the rental of “digital transmissions,” such as “on-demand” movies, television programs, streaming video, streaming audio and other similar programs, regardless of the method of transmission or the…
Rely at Your Own Risk: Taxpayer Properly Applies Georgia Regulation, Loses
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Posted in Policy and Legislation
By: Stephen Burroughs & Timothy Gustafson
The Georgia Tax Tribunal held that for sales and use tax purposes contractors are per se consumers of tangible personal property and thus are ineligible for: (1) the sale for resale exclusion, and (2) a regulatory exclusion for property temporarily stored in Georgia while in interstate commerce. The taxpayer…
Massachusetts Issues Final Revised Market-Sourcing Regulation; Multistate Tax Commission Working Group Continues Project Based on Massachusetts Regulation
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Posted in In the News, Policy and Legislation
By Robert P. Merten III and Prentiss Willson
Massachusetts has published its final revised market-sourcing regulation (830 CMR 63.38.1), effective for tax years beginning on or after January 1, 2014. The final revisions to these rules, among other things, conform the regulation with recent state law amendments requiring taxpayers to use market-based sourcing…
Electricity Transmission and Distribution Equipment Ineligible for Georgia Sales Tax Manufacturing Exemption
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The Georgia Tax Tribunal has held that an electric utility’s transmission and distribution equipment was not “necessary and integral to the manufacture of tangible personal property” and thus did not qualify for an exemption from Georgia sales and use tax. See Georgia Power Company v. MacGinnitie, Dkt. No. Tax-S&UT-1403540 (Ga. Tax Tribunal, Jan. 5…
#TBHoosier – Indiana Throws Sales Back Into Its Court
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Posted in California, Policy and Legislation
By Mary Alexander and Timothy Gustafson
The Indiana Department of Revenue applied the State’s throwback rule to an Indiana company’s sales to California customers based on a determination that the taxpayer was not subject to tax in California due to P.L. 86-272. Under Indiana law, a sale is attributed to Indiana for sales factor apportionment…