An administrative law judge with the New York State Division of Tax Appeals held that the federal Internet Tax Freedom Act (ITFA) preempted the imposition of New York franchise tax and a metropolitan transportation business tax (MTA) surcharge on gross receipts from sales of asymmetric digital subscriber line (ADSL) and fiber broadband aggregation and access services (Fiber Broadband).
An administrative law judge in the New York State Division of Tax Appeals rejected the state’s position that a taxpayer providing a web-based service which allowed clients to identify effective and ineffective messaging through information, analysis, and reports was selling taxable software. Following the rationale applied in a series of recent sales tax cases, including Matter of 1Life Healthcare, Inc., DTA No. 829434, and Matter of Breakdown Services, Ltd., DTA No. 829396, the judge concluded in her September 29, 2022 determination that the taxpayer’s service was nontaxable because its primary function was an information service that was personal or individual in nature.
Pillsbury SALT partners Jeff Vesely, Annie Huang, Marc Simonetti and counsel Robert Merten III will present during COST’s 2021 SALT Workshop for the Tech Industry August 11 through 13.
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On March 29, 2021, Tennessee Governor Bill Lee signed legislation creating a new sales and use tax exemption and a new franchise and excise tax (F&E) credit for “qualified productions.” H.B. 141, 112th Gen. Assemb., ch. 70 (Tenn. 2021). The new legislation is expected to attract greater production activity, especially smaller-scale productions, to the state and put Tennessee on a competitive footing with other states that offer tax incentives to the industry. Continue Reading ›
On February 15, 2021, the Maryland Court of Appeals issued a decision in Clear Channel Outdoor, Inc. v. Director, Department of Finance of Baltimore City, Case No. 24-C-18-001778 (Md. 2021), upholding the constitutionality of a local ordinance that imposes an annual excise tax on businesses selling advertising space on off-site billboards. The tax in question applies only to businesses that own or control off-site billboards in the City of Baltimore i.e., billboards that are not located on the premises where the goods or services being advertised are offered for sale. Continue Reading ›
On February 12, 2021, Maryland legislators voted to override Gov. Larry Hogan’s (R) veto of H.B. 732, making Maryland the first state in the nation to impose a digital advertising tax. While Maryland’s enactment of the bill is a first, other states have impending digital advertising tax bills, such as New York, Connecticut, Indiana, Nebraska, Washington, Montana and Massachusetts. Maryland’s digital advertising tax, which becomes effective March 14, 2021 (30 days after the Governor’s veto), has been preemptively challenged in U.S. District Court. Continue Reading ›
A federal district court held that under comity principles, Indiana state court is a more appropriate venue for a putative class action brought by three Indiana municipalities seeking to impose franchise fees on a group of online video providers. Order, City of Fishers v. Netflix, Inc. No. 1:20-cv-02351-JMS-MPB (S.D. Ind. Nov. 18, 2020). The federal district court remanded the case to the Marion Superior Court, where it was originally filed.
Pillsbury partners Jeff Vesely and Annie Huang will present “Market-Based Sourcing Issues in the Southwestern States with a Focus on California” during COST’s Pacific Southwest Regional State Tax Webinar on August 27.
COST’s 2020 conference for technology companies will provide 6 hours of topics which will cover the key state and local tax issues that technology companies (both start-up and established) are facing over the span of 3 days. Continue Reading ›
The District of Columbia Council finalized the 2021 fiscal year budget yesterday, which removed the recently enacted digital advertising tax. The Council’s July 28 vote formalized the elimination of a proposed 3% sales tax on gross receipts from traditional and digital advertising services and from the sale of personal information (e.g., IP addresses, , names, phone numbers, biometric data etc.). The proposal defined “digital advertising services” as “advertising services related to advertisements displayed on a digital interface, including advertisements in the form of banner advertising, search engine advertising, interstitial advertising, or other comparable advertising.” “Digital interface” was defined as “any combination of hardware and software that an individual may use to access internet-based platforms such as websites, parts of websites, or applications.”
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