United States

State and Local Tax Technology Checklist (Techlist)

Apr 18, 2018
From the KPMG TaxWatch

While technology and business models continue to evolve at warp speed, state tax laws change much more slowly. As a result, businesses deploying new technologies and business models face a great deal of uncertainty in attempting to evaluate how a tax law developed 75 years ago applies today.

States are increasingly attempting to address the application of tax to emerging technology and business models through new law, court cases and administrative rulings. Tracking developments is critical not only for technology providers, but also for purchasers of technology—which includes everyone.

To make recent developments more accessible to our clients, KPMG's Washington National Tax –State and Local Tax practice has created a Technology Checklist (Techlist) that summarizes recent state guidance for topics such as the taxability of software, guidance on digital equivalents and much more. The Techlist will be published on a quarterly basis.

If you have any questions about the Techlist, please contact Harley Duncan or Reid Okimoto.

Current Issue

State and Local Tax Techlist - Guidance from the First Quarter of 2018 - highlights include:

  • Indiana: Indiana enacted legislation exempting transactions involving Software as a Service (SaaS) from sales and use tax. 
  • North Carolina: The North Carolina Department of Revenue provided its first direct guidance on the taxability of SaaS, ruling that a taxpayer's cloud-computing product was not subject to tax. 
  • Pennsylvania: The Pennsylvania Board of Finance and Revenue issued two orders that both ruled that taxpayers were entitled to a partial refund of sales tax paid on purchases of software based on the percentage of users located out of state. 
  • Texas: The Texas Comptroller of Public Accounts ruledthat sales tax applies to subscription fees for additional benefits related to a taxpayer's Internet-based platform for viewing streamed and on-demand videos that are broadcast or uploaded by third parties.