State Taxation of Digital Goods and Services: Cloud Computing, Cryptocurrency, Gaming, Virtual Transactions

Note: CLE credit is not offered on this program

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


Conducted on Wednesday, July 29, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will cover situations actually and potentially creating state income tax nexus for digital revenue received by businesses. Our SALT panel will discuss how specific states determine nexus for digital goods and products, which states have rules concerning the determination, and how to best apply current nexus standards in states that do not.

Description

Many states have enacted guidelines concerning sales tax and digital goods; however, state income tax regulations are either evolving or non-existent. Squeezing digital goods into existing state nexus rules is a growing challenge for SALT practitioners. With the ever-increasing number of digital products and services, state tax advisers must grasp reporting, remittance, and taxation rules in various states.

The breadth of items in this category continues to grow. Music and book downloads, cryptocurrency, cloud software, gaming, and even health services offered digitally can and do create economic nexus in various states. Whether a state has adopted a market based or factor-based nexus standard impacts the application of existing regulations to digital sales. Sales of digital assets into a state, relationships with individuals in a state (miners or agents, for example), as well as the location of a server, can each create nexus with a state.

Most states have established rules for classifying computer software as tangible or intangible property for sales tax purposes. However, these determinations can and do differ for sales tax and income tax determinations.

Listen as our panel of SALT experts explains income tax nexus for digital goods in states throughout the U.S., including the common methods utilized to determine nexus, nexus traps for the unwary, and best practices for companies receiving digital revenue from multiple states.

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Outline

  1. Digital goods
    1. An overview
    2. Categories
  2. State methods for determining nexus for digital products and services
  3. PL 86-272 and its application to digital revenue
  4. Sales tax
  5. Specific examples
  6. Best practices for compliance

Benefits

The panel will review these and other critical considerations:

  • The application of state nexus determinations to specific categories of digital goods
  • How P.L. 86-272 applies to digital products and services
  • Which states are attempting to tax digital products in unexpected ways?
  • What are the standard methods for determining income tax reporting and remittance obligations in most states?
  • What steps can professionals take to ensure businesses are not subject to unnecessary taxation in specific states?

Faculty

Carrasco, Eric
Eric Carrasco

Indirect Tax Manager
PM Business Advisors

As an Indirect Tax Manager at PMBA, Mr. Carrasco has helped his clients in determining their sales and use tax...  |  Read More

Roberts, Stacey
Stacey L. Roberts, CPA

State and Local Tax Director
TaxOps

Ms. Roberts finds the singular state and local tax (SALT) area fascinating and is energized by the daily challenges to...  |  Read More

Vignone, Chris
Chris Vignone

CEO & Managing Director, Business Advisory
PM Business Advisors

Mr. Vignone has over 20 years of experience in providing business advisory services to corporate America. His clients...  |  Read More

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