How has the issue of taxing Digital goods evolved and where are the states headed?
“I think the point that you just made is it is a moment in time and technology is ever evolving so the states don’t know where to head with this type of stuff. I think the one state that tried to predict where it would go would be Washington state. In 2010, they had sweeping legislation (SHB 2620) largely brought about by Representative Hunter, who had previously worked with Microsoft. They recognized that technology changed constantly so, whatever they enacted today would possibly be obsolete tomorrow by tomorrow’s technology. They put together a bill taxing something they called “digital automated services” — it’s really the only legislation we’ve seen of that nature — and it was really meant to capture anything technology related. But then what they did is they created all of these carve outs and exceptions so that they weren’t arguably expanding the tax base. But the problem is that the devil is in the details. The exceptions became obsolete, right, or subject to interpretation. I’d say most of the controversy we see in Washington is around their exceptions and what those exceptions mean. So, where the stakes are heading is tricky.”
~ Carolynn Kranz, Kranz & Associates PLLC
In this episode of the SALTovation podcast, we speak with Carolynn Kranz, founder and managing member of Kranz & Associates, PLLC and Industry Sales Tax Solutions, LLC, and our own Judy Vorndran. Carolynn shares her knowledge and perspective on taxing digital goods, services and advertising. Listen as she shares how businesses can maintain tax compliance in a fast-moving digital world.