Archive: Sales tax

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Sales Tax Landscape for SaaS Companies

In June 2018, the U.S. Supreme Court issued its decision in the South Dakota v. Wayfair, Inc. case, paving the way for states to impose a sales tax collection obligation on in-state sales, even if the seller does not have a physical presence in the state. As a result, many software as a service (SaaS) […]

“Kill Quill” Effort Moves Forward at U.S. Supreme Court

It took 26 years, but on January 12, 2018 the U.S. Supreme Court agreed to consider overturning the long-standing “physical presence” nexus standard that applies for sales and use tax. If the Court sanctions the South Dakota law that is the subject of the appeal, it will pave the way for states to require out-of-state […]

Tennessee Sales Tax Rule Continues Economic Nexus Trend

This article was co-authored by Paul A. Zee-Cheng. On October 3, 2016, Tennessee issued a proposed rule making it the third state to impose a sales tax collection obligation on certain out-of-state sellers with no physical presence in a State (Rule 1320-05-01-.129). Under the new rules, out-of-state sellers who make over $500,000 in sales to consumers […]

Note to Not-For-Profits: Don’t Ignore Sales Tax

Making assumptions when it comes to sales and use tax is ill-advised for any entity’s approach to compliance.  This is especially the case for not-for-profits.  Exemption from federal income tax can count for nothing in the sales and use tax world, and states are anything but uniform when it comes to exemptions available for not-for-profits.  […]

Pennsylvania Sales Tax Goes Digital

Effective August 1, 2016, Pennsylvania’s sales tax will be imposed on the sale of digital products. Thus, sellers of digital products should start collecting Pennsylvania sales tax on such sales to customers located in Pennsylvania. This is a significant expansion of the sales tax base in Pennsylvania, with purchases of music, smartphone “apps,” and online […]

New Sales Tax Law Fast-Tracks Constitutional Challenge in South Dakota

On March 22, 2016, South Dakota enacted legislation (SB 106) that requires certain out-of-state sellers with no physical presence in the state to collect and remit the state’s sales tax on sales to South Dakota customers. Beginning on May 1, 2016, the obligation to collect the state’s sales tax for out-of-state sellers is based solely […]

The Sourcing Tail Wagging the Nexus Dog

There is a growing list of states that have adopted a more aggressive income tax nexus standard.  On August 11, 2015, Alabama added itself to the group of states that impose their income tax on out-of-state businesses solely based those businesses a certain level of sales to customers in the state.  The trend is a […]

Tennessee Sales Tax Enters the Cloud

Effective July 1, 2015, Tennessee will begin imposing its sales tax on remotely accessed software (i.e., software-as-a-service).  The taxability of software-as-a-service, also known as SaaS, is a developing tread across the nation, as software providers continue to expand their product offerings over the cloud.  Other states that impose a sales tax on remotely accessed software […]

Tennessee Sales Tax Enters the Cloud

Effective July 1, 2015, Tennessee will begin imposing its sales tax on remotely accessed software (i.e., software-as-a-service).  The taxability of software-as-a-service, also known as SaaS, is a developing tread across the nation, as software providers continue to expand their product offerings over the cloud.  Other states that impose a sales tax on remotely accessed software […]

Goodlatte Proposes “Origin” Approach for Internet Sales Tax

On January 13, 2015, House Judiciary Chair Bob Goodlatte (R-VA) released a discussion draft of his long-awaited plan to simplify the collection of state sales tax on internet sales. The Online Sales Simplification Act of 2015 adopts an “origin” based approach to collecting sales tax, as opposed to the “destination” approach included in the Marketplace […]