SALT Technology Checklist
A quarterly publication that summarizes technology-related state tax guidance and legislative developments
Guidance from the Third Quarter of 2025
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 state and local tax developments related to technology more accessible to our clients, Washington National Tax–SALT has compiled a technology checklist (Techlist) that summarizes state guidance issued during the second quarter of 2025. Topics covered include data center exemptions; data processing; digital equivalents; the taxability of software; and telecommunications services.
Highlights include:
- Maryland: The Maryland Comptroller released several technical bulletins regarding the state’s new 3 percent sales and use tax on certain data and information technology services and software publishing services. The bulletins address questions regarding the scope of taxation of services, the treatment of Software-as-a-Service (SaaS), timing matters, and the use of MPU certificates.
- Indiana: The Indiana Department of State Revenue ruled that a taxpayer’s generative AI chatbot service constituted a nontaxable service. The taxpayer’s customers did not gain permanent ownership of prewritten software, and the service did not meet the definition of a taxable specified digital product.
- Texas: The Texas Comptroller ruled that a taxpayer’s fee charged to fuel stops based on the total sale of discounted fuel facilitated through its mobile app was taxable as a data processing service. The app helped truck drivers find fuel stops with discounted fuel and amenities, generated codes to redeem fuel discounts, and provided fuel stops with downloadable transaction reports. The Comptroller found the app’s functions constituted data compilation and manipulation, which fall squarely within the definition of data processing.
- Washington: Washington’s Department of Revenue issued nine interim guidance statements to assist taxpayers in complying with Engrossed Substitute Senate Bill 5814, which expanded the term “retail sales” to include certain business activities and services that were not previously subject to sales tax. Topics addressed include advertising services, custom software, IT services, live presentations, security services, and temporary staffing.
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