SALT Technology Checklist

Highlights include:

• California: The California Court of Appeal upheld the application of Santa Barbara’s Telecommunications and Video Users’ Tax to internet streaming services. The court ruled that “video services” under the ordinance includes streaming, and rejected claims of violations of the Internet Tax Freedom Act and constitutional provisions. 
• Colorado: The Colorado Department of Revenue clarified that, starting July 1, 2025, interstate telephone and telegraph services became subject to sales tax. Mobile telecommunications services are taxable if the customer’s primary place of use is within Colorado. 
• Iowa: The Iowa Department of Revenue released guidance on the state’s sales and use tax incentives for data center investments. Large projects over $200 million may qualify for full exemptions on equipment, infrastructure, and utilities, while smaller investments can claim partial refunds for up to ten years. Eligibility depends on facility size, sustainability standards, and timely registration and reporting.
• New York: The New York Tax Appeals Tribunal affirmed that a pair of taxpayers’ subscription fees for integrated facilities management services were taxable as bundled transactions including prewritten software. The taxpayers’ agreements explicitly licensed the software platform, making it integral to the service package. Because the fees were non-itemized, the entire amount was taxable. The Tribunal rejected applying the primary purpose test, noting the bundle included both tangible personal property and services. 
• Tennessee: The Tennessee Department of Revenue ruled that subscriptions for a mobile heart health app are subject to sales and use tax as sales of software. The Department determined that the primary purpose of the subscription is access to the app, which tracks health metrics, generates reports, and provides automated wellness guidance. Because these features are delivered by software and not medical professionals, the subscription is taxable.