SALT Technology Checklist
3rd Quarter – A quarterly publication that summarizes technology-related state tax guidance and legislative developments
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 3rd Quarter 2024 checklist include:
- Iowa: The Department of Revenue issued a declaratory order clarifying questions about the requirements to qualify for the data center business sales tax exemption. Notably, multiple entities at one facility cannot aggregate investments to meet the minimum requirement. The exemption also requires that a qualifying entity must initiate site preparation activities for the data center.
- New Jersey: Governor Phil Murphy signed Assembly Bill 4558, which introduces the “Next New Jersey Program” to provide new tax credits for eligible artificial intelligence businesses. Eligible AI businesses are those primarily engaged in the AI industry or large-scale AI data centers. The program also requires a minimum capital investment and the creation of new full-time jobs in the state.
- New York: The Department of Taxation and Finance concluded that a taxpayer’s mobile and web analytics services that helped businesses understand their customers’ online behavior were taxable information services. The services involved collecting, compiling, and furnishing information to generate customized reports on user behavior, thus falling within the definition of an information service. The taxpayer was also not eligible for an exclusion because the taxpayer used customer data to generate benchmarking reports which were furnished to the public.
- Washington: The Department determined that taxpayers’ signature and document workflow services were subject to retail sales tax and retailing B&O tax. The taxpayers’ services were classified as digital automated services, and their associated support and training services were exclusively connected to the digital automated services. Therefore, the associated support and training services were a part of the retail sale of digital automated services subject to the retailing B&O tax and the retail sales tax.
More developments are covered in the full Techlist, download it below.
Dive into our thinking:
Meet our team
