MultiTax Commission

An intergovernmental state tax agency whose mission is to promote uniform and consistent tax policy and administration among the states, assist taxpayers in achieving compliance with existing tax laws, and advocate for state and local sovereignty in the development of tax policy.

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Sales Tax on Digital Products

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 and conducting 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 and review of the white paper, as it is developed.

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

 

Upcoming Meeting Notice

Agenda

Thursday, June 6, 2024 – 11:00 a.m. Eastern

I. Welcome and opening remarks

II. Initial public comment

III. Review of notes from April 4, 2024 work group meeting

IV. Next steps

V. Adjourn

 

For information about this meeting, contact MTC General Counsel Nancy Prosser at nprosser@mtc.gov.

Dial-in/Log-in Information 

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Prior Meeting Agendas, Materials, and Notes

Digital Goods Workgroup Agenda, April 4, 2024

Digital Goods Workgroup Agenda, February 1, 2024

Digital Goods Workgroup Agenda, January 11, 2024

Digital Goods Workgroup Agenda, November 2, 2023

Digital Goods Workgroup Agenda, October 5, 2023

Digital Goods Workgroup Agenda, September 7, 2023

Digital Goods Workgroup Agenda, August 3, 2023

Digital Goods Workgroup Agenda, July 6, 2023

Digital Goods Workgroup Agenda, June 1, 2023

Digital Goods Workgroup Agenda, April 6, 2023

Digital Goods Workgroup Agenda, Special Meeting with Avalara Representatives, March 28, 2023

    • (no attachments)

Digital Goods Workgroup Agenda, March 2, 2023

Digital Goods Workgroup Agenda, February 2, 2023

Digital Goods Workgroup Agenda, January 5, 2023

Digital Goods Workgroup Agenda, December 8, 2022

Digital Goods Workgroup Agenda, October 27, 2022

Digital Goods Workgroup Agenda, September 22, 2022

Initial MTC Materials

White Paper Issue Outline

 On April 28, 2021, representatives from the Washington Department of Revenue gave a presentation to the MTC Uniformity Committee in which they described their state’s experience with imposing sales tax on digital products as well as the alternatives considered. They also proposed that the Committee take up a project to help states develop a simpler and more adaptable approach. 

– Washington Presentation 2021 (PowerPoint Slides)

– Washington Presentation on Sales Taxes on Digital Products 2021 (Video)

The Committee asked the Standing Subcommittee to review the project proposal. The Standing Subcommittee recommended to the Uniformity Committee that a work group be formed to draft a white paper.

– Final Recommendation – Project on Sales Taxation of Digital Products – as Approved June 17, 2021​

The Uniformity Committee asked MTC staff to first solicit input from stakeholders and prepare a detailed outline of the white paper, identifying issues to be addressed. It directed staff to talk to stakeholders, review the relevant research, and identify issues to be included in a detailed outline of that paper. 

During 2021 and 2022, MTC staff conducted 43 separate interviews of individuals or groups representing particular taxpayers, states, or other organizations, as well as practitioners and academics. (See Appendix). They surveyed other relevant research, including studies done by other groups, much of which also is cited throughout this outline. They also monitored work of the Streamlined Sales and Use Tax Governing Board (“Streamlined”) and the New Jersey Division of Taxation’s study on the taxation of the digital economy generally, which is being done in conjunction with Rutgers University. 

Among stakeholders, administrators, and experts, it appears there is widespread agreement on some issues. For example, there was almost unanimous agreement that the proposed white paper is a good idea. On other issues, as might be expected, viewpoints diverge. Nevertheless, there is no doubt as to the significance of particular issues and those issues have been incorporated into the detailed outline along with the related questions.