United States

State and Local Tax Technology Checklist (Techlist)

Oct 13, 2016
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 Third Quarter of 2016 - highlights include:

  • Ohio: The Ohio Legislature passed a bill providing that sales of digital advertising services are personal and professional services, not subject to tax as automatic data processing, computer services, or electronic information services.
  • Pennsylvania: Pennsylvania Governor Tom Wolf signed a bill imposing sales and use tax on various digital goods by including videos, photographs, books, any otherwise taxable printed matter, applications, games, music, and canned software under the definition of tangible personal property, whether electronically or digitally delivered, streamed, or accessed.
  • South Carolina: The South Carolina Department of Revenue ruled that charges paid by customers for streaming television programs, movies, music, and other similar content are communication services subject to South Carolina sales and use tax, whether or not such charges are paid for as part of a subscription, per item, or per event.
  • Virginia: The Virginia Department of Taxation issued guidance to a taxpayer on the sales and use tax and corporate income tax treatment of its purchase, customization and resale of cloud-based software.