On July 17, 2018, the Wisconsin Court of Appeals held that a taxpayer’s services qualified as taxable “laundry services” and were subject to Wisconsin sales tax.  The taxpayer entered into service agreements with clients and provided them contract cleaning services.  The taxpayer would hire its clients’ existing laundry department workforces as employees, who would then

By Jessica Eisenmenger and Open Weaver Banks

The Wisconsin Court of Appeals for District III upheld the Tax Appeals Commission’s decision that separating dredged material from contaminated river water into its constituent parts for the purpose of water pollution remediation constitutes “processing” of tangible personal property and is therefore a taxable service. Tetra Tech EC,

By Charles Capouet and Jonathan Feldman

The Wisconsin Court of Appeals held that Wisconsin courts lacked personal jurisdiction over the Mississippi Department of Revenue so as to subject it to a lawsuit in the state. An individual taxpayer asserted that the Mississippi DOR had filed a fraudulent tax lien against him. The taxpayer moved from

By Todd Betor and Jonathan Feldman

On February 11, the Wisconsin Court of Appeals held that the receipts earned by Orbitz, an online travel company, from its services and markups for reserved rooms are not subject to sales tax. Specifically, the court determined that Orbitz is not “furnishing” rooms or lodging for purposes of Wisconsin

By Nick Kump and Timothy Gustafson

The Wisconsin Tax Appeals Commission overturned a $2.4 million assessment against an intellectual property (IP) holding company, ruling that the company’s income-producing activities for Wisconsin sales factor purposes – IP licensing and related activities – occurred entirely outside of the state. The taxpayer, a wholly owned subsidiary of the

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

Administrative Guidance

  • 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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In two procedural cases, appellate courts in Oregon and Wisconsin dismissed taxpayer appeals for using improper service methods, despite the fact that the Department of Revenue in each case actually received the notice of appeal.

The Oregon Supreme Court dismissed an appeal from the Tax Court, finding that the taxpayer failed to properly serve the

Florida Department of Revenue (DOR) ruled that tuition receipts from online courses are sourced to the location of the student, as opposed to the location where the costs of performance (COP) are incurred. Technical Assistance Advisement, 12C1-006 (May 17, 2012). While the ruling acknowledges that Florida applies COP for sourcing service revenue (by virtue of