On October 8, Vermont’s governor signed bill H. 954, which includes, among other things, a requirement for marketplace facilitators to collect the state’s universal service charge – generally charged on retail sales of prepaid wireless telecommunications services. This new collection obligation takes effect July 1, 2021.
Vermont Legislature Addressing Several Digital Tax Issues in Miscellaneous Tax Bill
Vermont H. 954, a collection of miscellaneous tax proposals, includes several digital taxation proposals. Vermont currently charges a 2.4% “universal service charge” on the sale of prepaid wireless telecommunication services. H. 954 would require marketplace facilitators collecting the corresponding sales tax to also collect the universal service charge beginning July 1, 2021. Additionally, H.…
Several State Legislatures to Take Historic Pause Due to COVID-19 Concerns
With the threat of COVID-19 looming, several state legislatures will halt or temporarily suspend their legislative sessions, including: Colorado, Delaware, Connecticut, Georgia, Kentucky, Maine, Maryland, New Hampshire, and Vermont. For many states, this is an unprecedented move while in others, the legislature has not adjourned early since the Civil War. Other state legislatures, like California’s…
Fresh Tracks: Vermont Supreme Court’s First Unitary Ruling Separates Insurer from Ski Resort
By Liz Cha and Timothy Gustafson
In its first decision on combined unitary reporting since Vermont adopted combined reporting in 2006, the Vermont Supreme Court held that the AIG insurance group was not unitary with its wholly owned ski resort subsidiary, Stowe Mountain Resort. Applying the U.S. Supreme Court’s test for unity articulated in Mobil…
Tax-Free Conferencing: Vermont Commissioner of Taxes Rules Conference Bridging and Meeting Collaboration Software Services Not Subject to Sales Tax
By Suzanne Palms and Timothy Gustafson
The Vermont Commissioner of Taxes determined that conference bridging and meeting collaboration software services provided to Vermont customers were not subject to sales and use tax. The service provider’s conference bridging service allowed customers to call into a number with an access code to participate in a conference call…
Fresh Powder in Vermont: Taxpayer and Ski Resort Not Unitary
By Stephen Burroughs and Andrew Appleby
A Vermont Superior Court held that the Commissioner of Taxes unconstitutionally applied the unitary business principle to AIG and its subsidiary, Stowe Mountain Resort. Stowe operates a ski resort, lodging and conference business in Vermont. None of AIG’s other 700 subsidiaries resemble a ski resort, and the Commissioner acknowledged…
Vermont Expands Taxation of Software to Include Remotely Accessed Prewritten Software
The Vermont Department of Taxes has released draft regulatory language regarding the collection of sales tax on remotely accessed prewritten software. In an effort to clarify further, the Department of Taxes will publish regulations to provide further guidance regarding the application of the tax. The deadline for comments on the draft rules is October 1.…
More News is Bad News for Publisher in Vermont: Newspaper Coupon Books Not Exempt from Sales and Use Tax
By Scott Booth and Prentiss Willson
The Vermont Supreme Court held that coupon books distributed monthly, within a free weekly newspaper and also separately distributed on news racks, were not “component parts” of the newspaper, and thus were not exempt from Vermont sales and use tax as newspapers. Vermont exempts newspapers and tangible personal property…
Digital Economy Update: Administrative Guidance, Noteworthy Cases and Legislation
We recently launched the Sutherland SALT Digital Economy Forum, which provides comprehensive state tax resources regarding the taxation of the digital economy. Following is a summary of recent digital economy administrative guidance, noteworthy cases and legislation. If you would like to learn more about the Sutherland SALT Digital Economy Forum or any of the issues covered here, please contact us.
Sales, Use and Other Transaction Taxes
- Massachusetts Soliciting Comments on Software Directive. On February 7, the Massachusetts Department of Revenue issued a draft directive that addresses the application of the Massachusetts sales and use tax to sales of software and computer-related services.
- Wisconsin Updates Guidance Regarding the Sales and Use Tax Treatment of Computer Hardware, Software, and Services; Addresses Cloud Computing. On January 25, 2013, the Wisconsin Department of Revenue (DOR) updated its software guidance for sales occurring on and after October 1, 2009. While the taxability conclusions and destination-based sourcing regime remain largely unchanged, the DOR expressly addressed software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS).
- Missouri DOR: Computer Software May Not Be Eligible for Manufacturing Exemption. The Missouri Department of Revenue (DOR) recently determined that a company’s software programs were not eligible for the manufacturing equipment exemptions from sales and use tax because the software was not directly used in the manufacturing process.
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