So, sometimes it’s not *just* about the tax. It’s sometimes about the tech.
Back in 2007, as he introduced the iPhone, Steve Jobs described the touchpad interface like this:
In the 2002 film, Tom Cruise–as PreCrime Captain John Anderton–worked a crazy-cool, multi-touch interface in his quest to apprehend criminals based on foreknowledge provided by three psychic precogs. Since then, and in addition to the aforementioned iPhone (presumably making touch a prerequisite in the mobile phone market), we’ve seen echoes of Minority Report-like technology in the X-Box and Kinect games and (sort of) in this soon-to-be released keyboard (okay, maybe not as cool as true multi-touch, but it is neat).
By the end of 2012, and for just $70, consumers will be able to purchase a new gesture control system from Leap Motion.
While the tech isn’t new, the precision and affordability of the hardware make the launch of this device noteworthy. The applications are almost endless. Imagine, the sculptor working on a project for a hotel in Dubai. The artist, using data on the scale of the hotel’s grand lobby, will be able to actually ‘sculpt’ with his hands a 3-D model for the installation. He can then send the image to the hotel for approval in a 3-D form. A producer of surgical tools will be able to train physicians using this technology to manipulate a new device in a mutli-touch setting and the manufacturer will be able to use that training to get real-time feedback and data for use in manufacturing the tool to the physician’s specifications. And, let’s not forget the games. The games will be very cool.
So, what are the possible tax consequences associated with this new technology? For starters, the unit is certainly tangible property, and in some states applications–programs or access to programs–may be taxable as sales of software/tangible property. What about services sold that use this technology, such as the aforementioned custom design of a surgical tool? Many states still exempt digital services unless specifically enumerated by statute. In those cases, either amending the sales tax imposition statute or issuing a ruling or policy decision would might re-classify these services as taxable. However, would the state view such a service–say, a design service–as access to or use of the underlying software? Perhaps. Maybe the precogs know…