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Sales Tax and the Internet of Things (IoT): Determining and Avoiding Sales and Use Tax

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, November 3, 2022

Recorded event now available

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This webinar will define the Internet of Things (IoT), when these products are subject to sales and use taxes, and how the Internet Freedom Act affects their taxation. Our panel of SALT professionals will offer recommendations for structuring transactions to circumvent these taxes.


What is the IoT? Wikipedia describes IoT as "physical objects (or groups of such objects) with sensors, processing ability, software, and other technologies that connect and exchange data with other devices and systems over the internet or other communications networks." It further states the caveat that IoT is a misnomer since no public internet connection is required. The explosive growth of internet-connected, intelligent devices makes this an essential determination for state and local tax advisers.

Personal items like Apple watches, Fitbits, and Smart thermostats are most familiar. However, because all industries are moving to intelligent devices, the reach and application of sales and use taxes to IoTs have been explosive, spanning all industries. Tangible products combined with internet applications can create a combination of property and services subject to sales and use taxes, communications taxes, and regulatory fees.

The Internet Freedom Act was established in 1998 to prevent imposing state and local taxes on internet access. The Act has been continually extended and challenged since its inception. Determining whether an item meets the requirements of the Internet Freedom Act is complex.

SALT professionals working with all businesses need to understand the IoT, including what it covers, when IoTs are subject to sales and other taxes, the exceptions to taxation, and how sales tax treatment is influenced by the invoice and usage of the product.

Listen as our panel of sales tax experts explains the IoT, including specific examples of how different products are taxed and tips for avoiding taxation.



  1. Sales tax nexus
    1. Physical nexus and Wayfair
    2. Marketplace facilitator laws
    3. The influence of SaaS, NFTs, and cryptocurrency
  2. Internet of Things (IoT)
    1. Definitions
    2. Examples
    3. Significance
  3. Sales tax treatment
    1. Comparison with other models and treatments
    2. Internet Freedom Act
    3. How the items are sold, billed, and used affect sales tax treatment
    4. Examples
    5. Recommendations


The panel will cover these and other critical issues:

  • Tips for structuring transactions to eliminate or reduce sales and use taxes
  • How billing affects sales tax treatment
  • How the Internet Freedom Act influences taxation of smart items
  • The influence of Wayfair and cryptocurrency on the taxation of internet products
  • Examples of how and why specific IoTs are or are not subject to sales and use tax


Kimberly Buresh
Kimberly Buresh


Ms. Buresh has over 12 years of experience in state and local tax. She provides corporate and high net worth clients...  |  Read More

DoVale, Adam
Adam DoVale

Andersen Tax

Mr. DoVale has over 10 years of experience in state and local tax (SALT). He works with clients from a broad range of...  |  Read More

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