Sales, Use and International Tax Activity Update - April 2010

Washington Screams, “We Shall Now Tax Data Streams”

The Washington Department of Revenue has released a notice explaining the impact of Engrossed Substitute House Bill 2075, which expanded sales and use taxation to certain digital products.

Beginning July 26, 2009, sales and use tax applies not only to downloaded digital goods, but also to digital goods accessed by other means, such as subscription or streaming, and digital automated services.

The notice also clarifies that the following services remain subject to business and occupation (B&O) tax under the service classification, but are not subject to sales tax:

• Web site development or hosting;
• digital data storage; and
• online advertising services.

The Tax Topics Notice can be viewed on the Washington State Department of Revenue Web site.

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