SALT technology checklist

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

Harley T. Duncan

Harley T. Duncan

Managing Director, State & Local Tax, KPMG US

+1 202-533-3254
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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 4th Quarter 2021 checklist include:

  • Illinois: The Illinois Department of Revenue issued a general information letter addressing how bitcoin is characterized for purposes of applying the state’s apportionment rules and regulations. Upon review of applicable Illinois law and regulations, the Department confirmed that bitcoin is considered intangible personal property, but it is not included under the more limited definition of patents, trademarks, copyrights, or other similar items
  • Iowa: The Iowa Department of Revenue, in updated guidance, explains that although the term web hosting is not defined by the Iowa Code or existing rule, it is generally understood as an online service that allows users to publish their website files to the internet, thus making the website available for public access. Web hosting is focused on the publication of data and not its mere storage; therefore, web hosting is not an enumerated service when it is provided in a traditional, stand-alone manner.
  • Kentucky: The Kentucky Department of Revenue held that a customer’s access to prewritten computer software hosted online with no physical download or other transfer was not subject to Kentucky sales and use tax. The Department concluded that under a SaaS model, the charge for access and use of the taxpayer’s software does not constitute the transfer or sale of tangible personal property. Rather, the prewritten software is a web-based SaaS model with no download of the Core Functionality.
  • Wisconsin:  In a new bulletin, the Wisconsin Department of Revenue stated that it will follow the Interpretation Opinion from the Streamlined Sales Tax Governing Board (SSTGB) and will not impose tax on the online banking platform as a telecommunications service. The SSTGB held that the services did not constitute “telecommunications services,” because the provider of the banking platform did not provide the connectivity (or the pipeline) to carry information between the taxpayer and its members. Instead, the connectivity was purchased separately by the taxpayer and each user from third-party vendors (i.e., telecommunications providers).

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

State and Local Tax Technology Checklist - 4th Quarter 2021
Technology-related state and local legislative developments and guidance

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