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The Seven Worst States For Sales Tax on Services

Sales tax is a transaction tax on the retail sale of tangible personal property and certain selected services. 45 states plus the District of Columbia impose a sales tax. Traditionally, the sales tax has been assessed upon all sales of tangible personal property (TPP) unless some specific exemption applies. On the other hand, services have

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How do States Tax Cloud Computing including Application Service Providers (ASPs) and Software as a Service (SaaS)?

SaaS and ASP (AKA “Cloud Computing,”) are now a very, and perhaps the most, common model for software delivery. Cloud Computing means that customers access specific software applications over the internet through third-party providers rather than through a single purchase loaded on a single computer. The sales and use tax implications of Cloud Computing are

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How do States Tax Construction Contractors?

In most states, if a contractor is performing work on real property, the contractor is deemed to be the final consumer, or the end user of the tangible personal property used to build the real property and, accordingly, must pay sales tax upon those purchases. Accordingly, in most states, as a purchaser of construction services,

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How do States Tax Manufacturing Equipment?

The first thing you need to think about in determining if certain manufacturing equipment can be purchased tax free is what is manufacturing? I’m sure that it comes as no surprise that the definition of the term “manufacturing” varies from state to state. For example, all manufacturing probably includes some processing and/or fabrication, but not

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Construction Contractors Subject to Tax on TPP

Based on a CCH survey of state tax departments, 41 states and the District of Columbia impose sales tax on purchases of tangible personal property (TPP) that are incorporated into realty. Three states responded to the survey with additional explanation — California, Nebraska, and Texas. As we pointed out in this article, Are Use Tax Amnesties

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Updated chart: Sales Tax on Shipping Charges

Updated chart: Sales Tax on Shipping Charges Sales tax on shipping charges is a tricky issue for tax professionals because states’ treatment of the tax varies widely. In Illinois, this issue was the subject of a class action lawsuit against the retailer Walmart. As we pointed out in our recent article, when the Illinois Supreme

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Good Sales Tax News for Manufacturers

These days, when it comes to sales/use taxes, good news is hard to come by. So many states are increasing taxes and rolling back exemptions and stepping up audit enforcement. A quick perusal of the headlines provides all the proof. New York, North Carolina, California and others are taking the position that merely having otherwise

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Is an iTune Taxable in California?

How About in Other States? Back in 2008, we wrote that the CA legislature was contemplating a change to its sales tax statutes to tax downloaded software. As it turned out, they didn’t change the law after all and electronically downloaded music and other digital goods in CA remained exempt from sales/use taxation. Meanwhile, a

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