SALT Technology Checklist

Highlights include:

• Multistate: Data Center Exemptions: Several states have recently implemented or expanded their data center incentive programs to encourage investment in facilities that allow tenants to establish their own cloud-computing servers in leased space. These incentive programs typically require specific investments, job creation, and wage standards.
• Texas: The Texas Comptroller issued a letter ruling addressing a taxpayer’s subscription-based offerings of marketing services for bars and restaurants. While services such as social media content creation or marketing communications may be non-taxable when sold separately, those services become taxable when bundled with taxable services and not separately stated. The Comptroller explains that if the taxable portion of a bundled charge exceeds 5 percent of the total, the entire charge is presumed taxable, even if the bundle includes nontaxable services.
• New York: The New York Court of Appeals upheld a decision finding that a taxpayer’s digital ad measurement service was a taxable information service. The service involved surveying ad viewers, analyzing responses, benchmarking results against a proprietary database, and delivering a report with insights and recommendations. The court also found that the service did not qualify for an exclusion for information that is personal or individual in nature and is not substantially incorporated into reports provided to other persons.
• Washington: The Washington Department of Revenue clarified the rules governing the MPU exemption for mixed-element software maintenance agreements (MESMAs) involving the sale of distinct and identifiable products for one nonitemized price. To be eligible for the MPU exemption, these agreements must involve prewritten computer software or software updates that are concurrently available for use both inside and outside of Washington, as well as other criteria.