Sales Tax on Digital Products

THE  REGULAR WORK GROUP MEETINGS ARE SUSPENDED WHILE DRAFTS OF THE WHITE PAPER SECTIONS
ARE PREPARED AND CIRCULATED. (See those drafts on this page, below.)

PROJECT DESCRIPTION:

At its July 28, 2021 meeting, the Uniformity Committee considered a recommendation from the Standing Subcommittee to begin drafting the outline of a white paper on state sales taxation of digital products. The committee agreed that MTC staff would begin the process by drafting a detailed outline of the issues to be included in that white paper after conducting necessary research and stakeholder interviews. At the August 2, 2022 meeting of the Uniformity Committee, the committee reviewed the proposed draft outline and agreed that a project work group should be formed to provide ongoing input into and review of the white paper as it developed.

IMPORTANT NOTE:

The information publised on this project by the MTC , including summaries of research into the approaches used by states in taxing digital products, is not intended as legal or tax advice on how current state tax laws would apply to particular products or transactions and cannot be used for that purpose. This information is meant solely to guide the discussions of the work group and others on the approaches states may use in taxing digital products. Those seeking information on the application of state tax law should contact the taxing states or licensed practitioners.   

For information about this or any other MTC uniformity project, contact MTC Uniformity Counsel Helen Hecht – hhecht@mtc.gov. 

The link above takes you to a digital outline with pages for the different topics covered in this project.
Each page has information used in this project including research, written comments, and any study group materials.

For notes and materials from prior work group, scroll down to the drop-down heading on this page below. 

DRAFTS OF WHITE PAPER SECTIONS – TOPICS/ISSUES:

NOTE: Drafts posted below are for discussion and comment. They may be revised prior to final submission to the MTC Uniformity Committee. 

Introduction and Purpose

Draft of White Paper Introduction – Purpose Section 7-15-26 (Word)(PDF)
Pupose Page of the Digital Outline, See HERE
Original Project Outline – Approved by the Uniformity Committee (PDF)

Imposition (Definitions)

Draft of Imposition (Definitions) Section – Coming Soon
Report from the Definitions Study Group – Made to the Work Group (PDF)
Evaluation of other State Approaces – See HERE – under “Evaluation of Other State Approaches” Drop Down
Imposition (Definitions) Page of the Digital Outline, See HERE

Issues of Sale

Draft of Issues of Sale Section – Coming Soon
Issues of Sale Page of the Digital Outline, See HERE

Exemptions and Exclusions

Draft of Exemptions and Exclusions Section – Coming Soon
Exemptions and Exclusions Page of the Digital Outline, See HERE

Mixed and Bundled Transactions

Draft of Mixed and Bundled Transactions Section – 4-28-26(Word)(PDF)
Mixed and Bundled Transactions Page of the Digital Outline, See HERE

Sourcing

Draft of Sourcing Section – Coming Soon
Sourcing Page of the Digital Outline, See HERE

Alternative Taxes

Draft of Alternative Taxes Section
Alternative Taxes Section of the Digital Outline, See HERE

Federal Law (Internet Tax Freedom Act and Other)

Draft of Federal Law (ITFA) Section – Coming Soon
Federal Law (ITFA) Section of the Digital Outline, See HERE

Other Related Issues

TBD

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