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State and local tax, technology-related guidance (table, fourth quarter 2017)

State and local tax, technology-related guidance

A report of U.S. state and local tax developments concerning technology-related tax issues, for the fourth quarter of 2017, provides updates in table format and covers topics such as access to web-based services, guidance on digital equivalents, taxability of software, and other items.

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Read the KPMG report [PDF 131 KB] of state and local technology-related tax developments for the fourth quarter of 2017.

Highlights

  • District of Columbia: The Office of Tax and Revenue issued guidance on the taxation of digital goods indicating that tax does not apply to digital books, digital audio books, digital music downloads and streamed music, and digital video downloads.
  • Illinois: The Department of Revenue ruled that tax was due on a SaaS transaction that included the download of a free mobile app because, while the taxpayer’s SaaS transactions were generally not taxable, the download of the free mobile application was a taxable transfer of tangible personal property.
  • Indiana: The Department of Revenue recently ruled that sales tax does not apply to an internal website search tool or a search engine optimization tool sold to retail customers for their websites.
  • Pennsylvania: Notice and reporting provisions were enacted and require remote sellers, marketplace facilitators, and marketplace referrers that have taxable Pennsylvania sales of at least $10,000 in the preceding 12 months to elect annually to either (1) collect and remit sales tax, or (2) comply with specified use tax notice and reporting requirements.
  • Texas: The Comptroller ruled that a company providing VoIP calling, Wi-Fi, text messaging, video messaging, and instant messaging may continue to source its sales based on the physical address associated with a user’s registration internet protocol (IP) address.
  • Virginia: The Tax Commissioner ruled that an online marketplace for ordering food from third-party restaurants was not a dealer required to collect sales tax.

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