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Michigan Extends Nexus to Similarly Named Businesses

Recently, Michigan Governor Rick Snyder signed two bills that introduce affiliate and click-through nexus: S.B. 658 (for sales tax) and S.B. 659 (for use tax).  The bills take effect October 1, 2015.  Michigan first considered affiliate nexus in 2011. As we reported, most recently in December 2013, Michigan’s affiliate nexus provisions are similar to those … Continue Reading

Florida’s Rose By Any Other Name: A “Music Service […] is a Music Service;” Unless It’s An Information Service

Recently, the Florida Department of Revenue (“Department”) issued companion advisory opinions 14A19-005 and -006.  The Department found that purchases and rentals of online movies and music are not subject to sales tax.  Furthermore, purchases are also not subject to communications services tax.   However, rentals are taxable as communications services. The taxpayer’s video service allows customers … Continue Reading

Tax Tech Bytes

Minnesota exempts webinars from sales and use tax Recently, Minnesota revised Tax Fact Sheet 177, announcing that webinars are tax exempt from sales tax starting July 1, 2014. In order to qualify for exemption, webinars must meet the following requirements: (i) in person presentation’s admission is not taxable; (ii) online participants can interact with presenters … Continue Reading

Clear Skies for Cloud Tax in South Carolina

Recently, The South Carolina Department of Revenue (“Department”) issued Private Letter Ruling 14-2 which found that cloud computing and storage services are not subject to South Carolina’s tax on communication services. A non-resident taxpayer requested the Department to determine whether their services are subject to South Carolina’s sales and use tax.  The taxpayer’s services include … Continue Reading

Idaho: Back-and-Forth on Software Tax

Recently, the Idaho legislatures convened for a draft rule meeting to discuss the recently enacted HB598 (“Rule 027”). The goal of the meeting was to provide guidance and interpretation to assist taxpayers in complying with Rule 027. The end result will be a published administrative bulletin. The legislatures discussed the sales tax policy and applied … Continue Reading

Wyoming Reveals “PaaS”sive Approach to Taxing the Cloud

On July 1, 2014, the Wyoming Department of Revenue issued a bulletin to address questions concerning the sales tax treatment of current technologies. The technologies include software, cloud computing and peripheral services. Wyoming levies a sales tax on tangible personal property. Tangible personal property includes computer software. Specifically, Wyoming taxes pre-written software regardless of delivery … Continue Reading

Georgia Ruling Affirms Its Position on Electronic Delivery

Recently Georgia’s Department of Revenue (“Department”) issued Letter Ruling SUT 2014-02-20-01 regarding software and cloud service transactions. A Georgia taxpayer requested the Department to determine whether these transactions are subject to Georgia’s sales and use tax. The taxpayer sells pre-written software, software modifications delivered electronically via the taxpayer’s site. The taxpayer is also a reseller … Continue Reading

Massachusetts Confirms On-Line Training is Tax-Exempt

Recently a Massachusetts taxpayer requested Massachusetts’s Commissioner of Revenue (“Commissioner”) to determine the taxability of its on-line training program. Taxpayer provides an interactive training program for various industries. Taxpayer is the primary source of the on-line content. Taxpayer’s cloud services are hosted by a third party. Customers have modest to limited interaction with the on-line … Continue Reading

Cloud Computing By Any Other Name…

Recently Missouri Department of Revenue amended their sales tax regulations on taxation of software.  Specifically, 12 CSR 10-109.050 was amended to clarify the taxation of canned (pre-written) software, customized software, software as a service, and software licenses. In general, the new regulations do not break new ground when defining what is canned software or customized … Continue Reading

In IL, It’s Location, Location, Location…..

Recently, Illinois Department of Revenue (“Department”) issued a Private Letter Ruling regarding sales apportionment for cloud services.  A non-resident taxpayer requested the Department determine the sales factor used to determine the percentage of non-resident’s business income taxable by Illinois. Taxpayer provides two types of cloud computing services. First, a dedicated cloud that provides services for … Continue Reading

Indiana’s Fulfillment-Center Legislation DOA

Indiana’s affiliate and click-through nexus legislation (SB269) has died before passing the Senate. We recently discussed this legislation that would have added click-through and affiliate provisions to Indiana’s sales and use tax in an attempt to target in-state fulfillment centers. The bill was introduced on January 13, 2014 by Indiana State Senator John Broden; however … Continue Reading

Maine Legislature Expands TPP Tax Base

The Maine legislature recently enacted a bill that amends the definition of tangible personal property to include any product that is electronically transferred. The bill also modifies the current affiliate nexus provisions with the rebuttable presumption used in other states’ affiliate nexus legislation. The expanded definition of tangible personal property, which includes electronically transferred products … Continue Reading

Technology Outpaces Michigan Statute

Recently, Michigan’s Court of Claims issued an opinion in Auto-owners Ins. Co. v. Dept. of Treasury, regarding the taxability of purchases of cloud computing services (“services”). A Michigan taxpayer made a motion for summary disposition to overturn Michigan’s Department of Treasury’s decision that these purchases were taxable. The taxpayer requested that the Court determine whether … Continue Reading

Virginia Confirms Position on Cloud Computing Services

Recently Virginia issued Public Document Ruling No. 14-42 concerning, in part, the taxability of cloud computing services. A Virginia taxpayer requested that Virginia’s Tax Commissioner clarify the state’s position regarding sales and use taxation of cloud computing services.  Taxpayer sells software to various types of businesses. Virginia provides an exemption from sales and use tax for services not … Continue Reading

Colorado Feels the “Effect” of the Drawn Out Debates over the Marketplace Fairness Act?

Colorado’s legislature is debating whether to delay the effective date of its so-called remote-seller law.  The law was enacted to allow Colorado to require on-line retailers to collect sales tax on retail sales for items delivered within the state of Colorado as permitted by the Marketplace Fairness Act of 2013 (“MFA”).  This remote-seller law was … Continue Reading

But If There’s a Flaw, It’s Human. It Always Is.

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: “It will feel like Minority Report.” 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 … Continue Reading

What We’re Reading…

– IBM has released a new study that indicates that cloud computing use will double by 2015.  The largest areas of development include E-Commerce and healthcare.  – Apple released a new iPad yesterday called (wait for it)… The new iPad.  The device is supposed to deliver downloads (taxable and non-taxable) at speeds 10 times faster than … Continue Reading