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The streaming services drama continues 🎭

The streaming services drama continues 🎭

Sales tax news, the latest in the world of digital streaming, and more...

Rohit Bhadange
May 05, 2024

Greetings, sales tax squad.

Spring has sprung.🌷

The flowers are blooming, the birds are chirping, and as always, sales tax is sales-taxing.

Today, we’re taking a look at some fresh (1) sales tax updates (2) the latest in sales tax & digital streaming and (3) a question from you.

SALES TAX NEWS

1️⃣ In Rhode Island, a corporation was not entitled to a refund for overpaying sales tax—despite signing a statute of limitations waiver during an audit.

2️⃣ Updated guidance from the Indiana Department of Revenue removed a 200-transaction threshold for determining remote seller sales tax nexus.

3️⃣ Compared to January 2023, Nevada brought in $23.8 million more in sales tax revenue this January, according to a monthly report from the state Department of Taxation.

4️⃣ Pennsylvania's state court affirmed that sales tax applies to purchases of sparkling water, since it is considered a soft drink that is subject to tax.

5️⃣ Louisiana's remote sellers commission is seeking to challenge the state's sales tax system. They claim that Louisiana's varying state and local tax rules are too burdensome for out-of-state businesses.

6️⃣ Under legislation signed into law, Arizona will create a certification process for sales tax sourcing service third-party providers.

7️⃣ In a bill introduced in the state Senate, Minnesota would expand a sales and use tax exemption for certain baby products to include all baby products.

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LET’S GET DIGITAL 💻

It’s been an eventful month in the world of digital streaming and sales tax.

In an ongoing battle over Netflix Inc.’s sales tax requirements within Colorado, a judge has sided with Netflix. He argued that because streaming subscriptions can't be physically touched, they therefore don't fit the definition of "tangible" property.

Streaming giant Peacock claims that Maryland’s digital ad tax violates the US Constitution and the Internet Tax Freedom Act. This is one of several related cases pending before the Maryland Tax Court.

Learn about sales tax on digital goods →

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YOUR QUESTIONS, ANSWERED!

Q (Elena): Did the Internet Tax Freedom Act ban taxes on Internet sales?

A: Nope. The Internet Tax Freedom Act prohibited new taxes on Internet access fees and discrimination of electronic commerce. Most states do not tax Internet access fees.

The Act did not prohibit states from imposing taxes on transactions conducted over the Internet. If a purchase is made online, it is generally taxed the same as if it was purchased offline.

The real question is whether a retailer is required to collect the tax, which is known as nexus.