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SALT Technology Checklist

4th Quarter 2023  – A quarterly publication that summarizes technology-related state tax guidance and legislative developments

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State and Local Tax

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 developments more accessible, the KPMG Washington National Tax –State and Local Tax practice has created a quarterly Technology Checklist that summarizes recent state guidance for topics such as access to telecommunications services, web-based services, software, and streaming services.

Highlights of the 4th Quarter 2023 checklist include: 

  • Florida: In a Technical Assistance Advisement, the Florida Department of Revenue determined that a customized digital video messaging service was subject to the Communications Service Tax (CST). The taxpayer’s service offered customers the ability to customize and transmit messages pre-recorded by entertainers, musicians, athletes, or other social media personalities. In the Department’s view, the services involved the “transmission of video, audio, or other programming services to a purchaser,” which are included in the definition of taxable video services. 
  • Missouri: The Missouri Supreme Court ruled that a retailer’s subsidiary was exempt from use tax for its purchase and use of IT equipment which was intended to be resold to other subsidiaries. The Missouri Department of Revenue argued that the subsidiary’s actions of installing, testing, and repackaging the equipment indicated it was not solely for resale. The court disagreed, holding that the subsidiary’s exchange of ownership of the equipment within its regular business qualified as a "sale" and "resale" for purposes of the tax exemption. 
  • New Mexico: The New Mexico Taxation and Revenue Department finalized amendments to regulations regarding the application of Gross Receipts Tax to digital advertising services. The amendments provide definitions and specify that the “receipts of a provider of a digital platform that displays digital advertising services, whose digital platform may be accessed or viewed within New Mexico, from the sale of advertising services to advertisers within and without New Mexico are subject to the gross receipts tax.” 
  • Utah: A Utah State Tax Commission judge ruled that a taxpayer must pay sales tax on subscription fees for streaming services. Although streaming services are not taxable in Utah, the bundling of the streaming services with an offline download feature made the entire service taxable as a bundled transaction.

Many more developments are covered in the Techlist, download it below. 

Dive into our thinking:

State and Local Tax Technology Checklist

Guidance from the fourth quarter of 2023

Download PDF

Meet our team

Image of Reid Okimoto
Reid Okimoto
Principal, State & Local Tax, KPMG US
Image of Audra Mitchell
Audra Mitchell
Managing Director, WNT - SALT U.S. Indirect Tax, KPMG US

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