SALT technology checklist

A quarterly publication that summarizes technology-related state tax guidance and legislative developments.

Reid Okimoto

Reid Okimoto

Principal, State & Local Tax, KPMG US

+1 206-913-4682
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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. 

To make recent developments more accessible, KPMG's Washington National Tax –State and Local Tax practice has created a quarterly Technology Checklist that summarizes recent state guidance for topics such as the taxability of software, guidance on digital equivalents, and much more. 



Highlights of the 2nd Quarter 2022 checklist include:

  • Colorado: Colorado has enacted a law imposing numerous new requirements on online marketplaces regarding the disclosure of information by “high‑volume third‑party sellers.” The new law, targeting potentially fraudulent online sellers, provides that online marketplaces must require a “high‑volume third‑party seller” to disclose certain information to the marketplace, including the seller’s bank account number, contact information, and business or individual tax identification number. A “high-volume third‑party seller” is defined as a third‑party seller that in any continuous 12‑month period during the previous 24 months has entered into 200 or more discrete sales or transactions of new or unused consumer products for which the third-party seller has earned aggregate total gross revenues of $5,000 or more.
  • Tennessee: Tennessee enacted legislation creating a broadband equipment exemption beginning July 1, 2022, which will run for three years through June 30, 2025. Specifically, the bill exempts from sales and use tax “purchases and leases of all equipment, machinery, software, ancillary components, appurtenances, accessories, or other infrastructure that is used in whole or in part to: (1) produce broadband communications services, including broadcasting, distributing, sending, receiving, storing, transmitting, retransmitting, amplifying, switching, providing connectivity for, or routing communications services or (2) provide internet access.”
  • Texas: The Texas Supreme Court reversed a lower appellate court decision addressing how satellite radio subscription revenues should be sourced for Texas franchise tax purposes. Importantly, the Court rejected the Comptroller’s use of the “receipt-producing, end-product act” test to determine where a service is performed. Instead, the court concluded that a service is performed in Texas when a taxpayer’s personnel or equipment is physically doing useful work for a customer in Texas.
  • Ohio:  The Ohio Supreme Court, reversing a decision of the Board of Tax Appeals, held that taxable automatic data processing and electronic information services are distinct services from nontaxable personal and professional services such as software customization. Sales tax applies to transactions that involve automatic data processing, electronic information services, or computer services when the true object of the transaction is to obtain the work performed by computer systems. On the other hand, sales tax does not apply if the true object of the transaction is to obtain personal and professional services that are coupled with the work performed by computer systems.

Many more developments are covered in the Techlist - download it below.

State and Local Tax Technology Checklist - 2nd Quarter 2022
Technology-related state and local legilsative developments and guidance

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