United States

Idaho: Streaming Services No Longer Subject to Sales Tax

Apr 06, 2015
From KPMG TaxWatch

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Recently enacted Idaho legislation revises the definition of “tangible personal property” subject to sales tax to exclude online streaming services. Recall in 2014, the Idaho legislature made changes to the state’s sales tax laws that the Idaho State Tax Commission later interpreted as subjecting online streaming services to tax. House Bill 209 amends the definition of tangible personal property to include computer software that constitutes digital music, digital books, digital videos, and digital games when the purchaser has a permanent right to use the software—regardless of how the customer receives or accesses the software. The legislation clarifies that if the right to use digital music, digital books, digital videos, or digital games is conditioned upon the purchaser’s continued payment for the right to use, then it is not considered a permanent right of use. Thus, streaming services will not be subject to sales and use tax. The legislation also repeals the definition of digital videos. Governor Otter signed the bill on March 30, and it became effective on April 1, 2015. For more information on Idaho H.B. 209 (effective Apr. 1, 2015), please contact Steve King at (206) 913-4881.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.