KPMG reports: Maine, Massachusetts, New York State, Tennessee, Wisconsin

Maine, Massachusetts, New York, Tennessee, Wisconsin

KPMG’s This Week in State Tax—produced weekly by KPMG’s State and Local Tax practice—focuses on recent state and local tax developments.

  • Maine: The state’s Supreme Court held that a taxpayer must remit sales tax on the regular purchase price of a cell phone—rather than on the discounted amount paid by customers who entered into wireless contracts with a third-party carrier at the time of the purchase. The taxpayer’s contract with the wireless carrier required that it be paid back the amount of the discount. The high court concluded that because the taxpayer expected to recoup its profits through payments made by the carriers, the payments were reimbursements—and not nontaxable discounts. Accordingly, the taxpayer owed sales tax on the regular purchase price of the phones. Read a March 2021 report

  • Massachusetts: Digital advertising proposals pending in the general assembly include:
    • House Docket 3210 would impose a digital advertising tax on taxpayers with at least $50 million in annual gross revenues and $100,000 in revenues derived from Massachusetts digital advertising services, with a tax rate ranging from 5% to 15%, depending on the taxpayer’s annual gross revenues.
    • House Docket 3601 would impose a 5% excise tax on the annual revenue from digital advertising services in Massachusetts for companies with revenue exceeding $25 million from such services.
    • House Docket 3558 would establish a special commission to conduct a comprehensive study relative to generating revenue from digital advertising that is displayed inside of Massachusetts by companies that generate over $100 million a year in global revenue.
    • House Docket 3522 and House Docket 3812 would impose new taxes on online or digital advertising.

Read a March 2021 report

  • New York State: The Department of Taxation and Finance rejected a taxpayer’s claim that it purchased one-half an interest in a Picasso painting for subsequent lease to others and was therefore entitled to a refund of the sales taxes paid. Although the taxpayer subsequently leased its interest in the painting, it also acquired the painting to enhance its art collection, and therefore its sole purpose for the acquisition was not for resale or re-lease. Read a March 2021 report

  • Tennessee: The Department of Revenue ruled that dues paid for memberships to a professional organization were not subject to sales and use tax, despite the fact that members received certain taxable items as part of the membership. Read a March 2021 report

  • Wisconsin: A state appeals court determined that the Department of Revenue was prohibited from advancing a position that was contrary to its published guidance. As such, the court upheld a Tax Appeals Commission decision that cash distributions from a foreign partnership that had elected to be treated as a corporation for federal income tax purposes, were eligible for the Wisconsin dividends-received deduction. Read a March 2021 report

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