Cyber Tax News


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Divergence in VAT Direction for Digital Books

The European Court of Justice (ECJ) has issued their rulings in two cases brought by the European Commission (EC) against France and Luxembourg respectively for violating the VAT Directive by applying a reduced rate of VAT to digital books.

Luxembourg began applying a VAT rate of 3% to digital books effective January 1, 2012 on the basis that equal treatment should be applied to all books for the purpose of fiscal neutrality. France has been applying a rate of 5.5% to digital books since January 1, 2014.

The EC based their position on Article 98 Principal VAT Directive, which allows the application of a reduced rate of VAT to supplies of goods and services listed in Annex III. It specifically states that the reduced rates shall not apply to electronically supplied services.

Kansas Dives Deep into Digital Micro Transaction Taxing

The Kansas Department of Revenue ruled that access codes, subscription cards, points cards, and notional value cards to access digital content, access networks, and enhance game play on a third party's server are not subject to sales tax because the downloaded content is not prewritten software.

This ruling applies to online or retail sales, along with redemption activities.

However, the department clarified that sales of access codes that allow customers to download prewritten software, such as a complete video game, are taxable whether sold in a physical retail environment or via the Internet.

New York Makes Taxpayer Sop-Up Tax on Oil Spill Services

A taxpayer’s environmental monitoring and testing services associated with cleanup for a petroleum spill were deemed taxable.

To make the determination, the New York Tax Appeals Tribunal used code section 1105(c)(5), “maintaining, servicing, or repairing real property.” The New York State Supreme Court then reaffirmed the tribunal’s ruling.

The Tax Appeals Tribunal stated that these are “activities that relate to keeping real property in a condition of fitness, efficiency, readiness, or safety or restoring it to such condition.”

Unhappily Ever After for UK Wedding Venue on VAT

The Appellant in this UK case owns a stately home that is licensed to hold wedding ceremonies. However, they contested that they are not wedding planners under the conditions that would require any VAT obligation.


Clients are allowed exclusive use of rooms under the conditions they exit the premises by Midnight, don’t sub-let the rooms, and keep them in good condition. Clients must use the Appellant's caterers and DJ.
The Appellant is responsible for cleaning the premises, offering heating and lighting, and furniture for the event such as tables and chairs. The Appellant also provides a telephone number in case of emergencies, and had a representative attend the event.

Web Based Apps, Not Necessarily a Service “Provided” in South Carolina

In Private Letter Ruling 14-5, the South Carolina Department of Revenue examined the taxability of a web-based insurance claims processing app. The once thought taxable communications service turned tables through the determination process to a nontaxable data processing service.


The taxpayer’s staff collects insurance claims information from commercial insurance carriers, verifies it for completeness and accuracy, and converts it to a standardized electronic format. This customer owned data is then uploaded to a database and delivered to each customer via the Internet.

Missouri Cans Confusion on Canned Software

The Applicant is an out-of-state corporation registered as a foreign corporation doing business within the state of Missouri. As part of its business, Applicant sells and leases canned software. In 2015, Applicant will only offer its software and software updates available with optional maintenance contracts via electronic download through the internet instead of via tangible media, such as CD-ROM, DVD or magnetic tape. All further upgrades for the software will also be delivered electronically instead of on physical media storage.

UK Yoga Studio Gets a Down Vote on VAT Exemption for Downward Dog

The Appellant in this UK case operates a yoga studio, teaching the exercise to private individuals.

They claimed their business was exempt from VAT based on the argument that yoga classes, which are taught in a large number of schools and universities, corresponds to their private yoga instruction. Using as justification for this argument, item 2 Grp 6 Sch 9 VAT Act 1994 that states:

"The supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer."

Electricity to Software: Major Misses in Manufacturing Exemptions

Here are three cases that will make you reexamine the true nature of materials before applying for your next manufacturing tax exemptions:

Indiana conveys skepticism towards conveyor belts when a manufacturer of boxes tried to claim the transportation systems were integral to the manufacturing of the final box. The state determined that the transportation system was used in post-production as it did not change the form, character or composition of the final product.

EU Commission Reports VAT GAP Bloated by Billions

According to the report an estimated €177 billion was lost in 2012 in twenty six Member States due to non-compliance and non-collection of VAT revenue. The report did not include results for Cyprus and Croatia. The VAT Gap is the difference between the amount of VAT due and the amount actually collected.

The VAT Gap ranged from a low of 5% in Finland and The Netherlands to a high of 44% in Romania. Eleven Member States saw their VAT gap decrease from 2011 to 2012 while fifteen saw it increase. Greece saw the biggest increase in collection between these years though their gap remains very high at 33%.

Iowa Entrepreneur Goes Hog Wild Over Solar Cleaning Services

The Iowa Department of Revenue (DOR) has recently ruled that power washing solar energy panels on hog buildings is a taxable service. The taxpayer is planning to start a business to perform that service because the panels collect a lot of dust.

The DOR determined the service would be considered the taxable service of "janitorial and building maintenance or cleaning. "Iowa Code section 423.2(6) provides a list of taxable services. The Department rules describe "building maintenance" as "cleaning of the exterior walls or windows of any building or any other act performed upon the exterior of a building with the intent to keep the building in good upkeep or condition”.

Michigan Passes Gas and Electricity Exemption for Manufacturer

A utility company was eligible for the industrial processing exemption from the Michigan use tax because the distribution equipment used to transmit the energy to customers changed the "form, composition, quality, combination, or character" of the product before delivery to taxpayers.

The definition of tangible personal property includes both electricity and gas. Therefore, tangible personal property used in the production of the items is exempt from use tax. Rule 205.115, cited by the Department of Treasury in support of taxing the utility company’s electrical distribution equipment, conflicts with the Use Tax Act and is invalid and unenforceable.

Missouri Gives Cold Feet Manufacturing Tax Freedom

The Missouri Department of Revenue recently gave a cold and dry storage/processor a warm reception for the manufacturing exemption when applied to the processing of poultry parts and chicken feet.

However, the DOR did squawk at ammonia being defined as integral to process, which requires local sales tax to be applied to clean up activities. View the full Missouri Private Letter Ruling No. LR 7419, 10/10/2014 on the Department of Revenue website.

Virginia Passes Gas and Electrical Manufacturing Exemptions

A taxpayer in Virginia recent sought clarity for certain systems in their manufacturing process that did not offer an easy view into how integral they were for final production of the product.

The Items

- Compressed air system and bulk gases that will be used to power equipment that are used directly in the manufacturing process were exempt.

Indiana Dresses Down Taxability on Manufacturing Wear

Purchases of safety equipment, tack cloth and wrapping materials by an industrial processor were not subject to Indiana sales and use tax under the manufacturing exemption.

Itemized Breakdown

- Kevlar gloves/sleeves, safety glasses, headgear, goggles, and clothing to protect workers from paint spray were exempt because the items prevented workers from injuring themselves in the production process, while nitrile gloves were taxable as they did not meet that standard.

Software Customization Comes With a Price and Tax

A seller in Minnesota was recently deemed accountable by the Supreme Court for sales tax on transactions of their sales tracking software since customization services weren’t separately stated on the invoice.

The software being examined is used by suppliers to assess the effectiveness of certain sales promotions or to track sales volume on certain products.

Each time the software seller sold a license, it customized previous versions of the software to meet the customer’s specific needs.

Georgia Clears Dark Skies of Cloud Taxability Confusion


A letter ruling issued to a taxpayer by the Georgia Department of Revenue discusses the sales and use tax treatment of a taxpayer’s sales of prepackaged software for download, prepackaged software enhancements for download, and cloud subscription services.

Software Ruling

Texas Trounces Manufacturer Exemption Claim

A taxpayer was not entitled to a manufacturing exemption from Texas sales tax for equipment used in extracting natural gas and oil, and for services pertaining to that equipment.


The taxpayer claimed that the purchases (casing, tubing, pumps, and related parts) qualified for a manufacturing exemption as either:
1. Property that directly made or caused a chemical or physical change to the product being manufactured,
2. Property that was necessary and essential to a pollution control process, or
3. Property that was necessary and essential to comply with governmental public health requirements.

Indiana Puts the Lid on Returnable Container Exemption

A business was liable for Indiana use tax on purchases of chemical storage tanks because they were returnable containers that were not resold.


Under applicable law, purchases of returnable containers that are sold empty are exempt when the retailer resells the containers with the purpose of refilling them and charging tax to the original container user.


The business transferred the tanks under a loan agreement requiring the customer to return the tanks at the business’s request or to reimburse the business if the tank is not returned.

VAT Refund Turns Tax Tables

In this UK case, two Appellants submitted a letter to HMRC notifying them that they had overpaid VAT due to two errors. The letter was intended to be a claim for refund under section 80 VAT Act 1994. As it turns out though, the true issue at hand was not whether VAT was due, but whether the letter the Appellants submitted to HMRC was a valid claim for refund.

The Appellants were Bratt Auto Services Limited (BAS), a vehicle rental company, and Bratt Auto Contracts Limited (BAC) , a long term vehicle contract hire company. The claims were that VAT was overpaid on the sale of demonstrator cars and on bonuses paid in respect of demonstrator cars.

Constructing a Shaky Permanent Fixed Establishment

This UK case involves a construction company that is established in Guernsey in the Channel Islands who was contracted to refurbish a pub located in the UK. Most of the work took place from January 2012 to July 2013. The construction company did have a director based in the UK and did use UK-based subcontractors to perform the work. The director and the subcontractors occupied parts of the pub while it was closed during the renovations.


The construction company applied for UK VAT registration and invoiced the owners of the pub (Appellant) for UK VAT.

Colorado says, "Show Me the Value" to Sports Services Firm

The Colorado Department of Revenue has issued a general information letter regarding the applicability of sales and use tax to fees that are charged for memberships that include tangible and intangible products and services.


The taxpayer, an association of recreational sport instructors and trainers, charged its members a $250 annual membership fee for:

• A guidebook
• Rights to display and use association marketing materials
• Option to purchase sport merchandise for resale
• Certification in the sport
• Subscription to a sport industry magazine

The sales and use tax applies to transfers of tangible personal property and specified services, but does not generally apply to purchases of services or intangibles.

Georgia Strips Down Manufacturing Exemption for Raw Material Testing

A letter ruling issued by the Georgia Department of Revenue discusses whether quality control equipment a manufacturer leased for the testing of raw materials in its manufacturing process was, in fact, exempt manufacturing machinery and equipment under O.C.G.A. Sec. 48-8-3.2.

Together with Reg. Sec. 560-12-2-.62, the department sought to determine whether the activities of testing the quality of industrial raw materials, work in process, or finished goods on this machinery were in fact integral to the output of the final manufactured tangible good.

Investigating “Integral”

ECJ Discounts the Monetary Nature of Discount Cards

In an update to an article from November 2013, the European Court of Justice (ECJ) has confirmed that discount cards are not VAT exempt.

As a reminder, the taxpayer in this Dutch case sells discount cards to its customers for a consideration. The cards can then be used for goods and services at any of the businesses with the Taxpayer's partner network. The Taxpayer does not receive payments from nor submit payment to the participating businesses. Instead the businesses leverage the cards as promotion for further engagement with the consumer. Card holders are entitled to either a reduced price on purchases or a buy one get one free offer. The cards are transferable, but cannot be exchanged for cash or goods.

Massachusetts Solidifies Line Between Software and Data Access

The Massachusetts Department of Revenue (DOR) issued a letter ruling explaining that a corporation's sales of online training applications, when sold alone, are considered nontaxable sales of database access services. The department was quick to note however that if other services were bundled with the software, taxability would depend upon the object of the transaction.

The Company is a corporation that develops and sells training applications or programs for various industries. Customers then access and choose these programs from an online library.

The Company can brand customize these programs for customers to access at any time from third party hosted servers.

Illinois Opens-Up eTextbooks for Tangibility Test

The selling and renting of electronic textbooks to students in public and/or private schools via Internet downloads are not taxable transactions according to the Illinois Department of Revenue.

While a fair question for the provider of these materials to ask of the DOR, the viewing and downloading of textbooks is really no different than other similar intangibles like other books, musical recordings, newspapers and magazines.

In all of these cases since no tangible personal property has changed hands they are not subject to Retailers' Occupation and Use Tax.

However, the DOR would like to remind businesses that the download of canned software programs remain subject to tax.

Stormy Weathers Kick Up Sales Tax Holidays in Louisiana and Florida

Louisiana will be holding its 2014 Hurricane Preparedness Sales Tax Holiday on Saturday, May 24, and Sunday, May 25. During the holiday period consumers will be able to purchase certain products or supplies free of state sales and use taxes.

The products qualifying for exemption during the Louisiana Hurricane Preparedness Sales Tax Holiday are:
• Portable self-powered light source;
• Portable self-powered radio, two-way radio, or weather band radio;
• Tarpaulin or other flexible waterproof sheeting;
• Ground anchor system or tie-down kit;
• Gas or diesel fuel tank;
• AAA-cell, AA-cell, C-cell, D-cell, 6-volt, or 9-volt batteries, excluding automobile and boat batteries;
• Cellular phone battery and any cellular phone charger;
• Non-electric food storage cooler;

Idaho Reboots Remote Delivery Software Taxation

Effective July 1, 2014, computer software that is delivered electronically, remotely accessed, or delivered by the “load and leave” method, will be exempt from Idaho sales and use tax.

The enacted legislation reverses current sales and use tax treatment for computer software delivered electronically or by load or leave, and it expands a previous exemption that was limited to only certain kinds of “remotely accessed” computer software.

Digital property is also defined under the new law as taxable tangible personal property.

California Calls for 8 Year Manufacturing Exemption

Starting July 1, 2014, to before July 1, 2022, a sales and use tax exemption is applicable to the gross receipts from the sale, storage, use, or other consumption in California of any of the following qualified tangible personal property purchased for use by:

• a qualified person to be used primarily (i.e., 50% or more of the time) in any stage of the manufacturing, processing, refining, fabricating, or recycling of tangible personal property, beginning at the point any raw materials are received by the qualified person and introduced into the process and ending at the point at which the manufacturing, processing, refining, fabricating, or recycling has altered tangible personal property to its completed form, including packaging, if required;

A Tale of Two VAT Rates for the Same Book

The AG has given his opinion on the questions that were raised by Finland on the taxability of books on different media.

The issue is the applicability of the reduced rate to printed books, while books on other physical media such as a CD, CD-ROM or memory stick are standard rated. The questions referred by Finland were:

1. Do the first subparagraph of Article 98(2) and point 6 of Annex III (as that point appears in Council Directive 2009/47/EC) to Council Directive 2006/112/EC ..., when the principle of tax neutrality is taken into account, preclude national legislation under which a reduced rate of value added tax is applied to printed books, but the standard rate of tax is applied to books on other physical means of support such as a CD, CD-ROM or memory stick?

No Pain, No Gain (or Loss of VAT Obligation)

The Court of Appeals has upheld an Upper Tribunal decision that amounts collected from defaulting gym members after they were barred from using a gym were consideration for a taxable supply of the right to use the gym facilities.


The taxpayer in this case operates a gym. Gym members sign up for a membership period of 12 to 24 months and make monthly payments. If a member defaults on a monthly payment access to the gym is denied until all payments are up to date. The taxpayer is entitled to all payments during the membership period and does make attempts to collect them. The taxpayer believed that any payments received after default were no longer consideration for the use of the gym facilities because the gym was no longer available to defaulting members.

Virginia Sports Park Strikes Out on Tax Clarity

A sports-themed amusement center’s total charge for its party packages is subject to Virginia retail sales and use tax.


The taxpayer charges a single price for the party packages, which include admission to the amusement center attractions and food items. The total charge for the party packages is subject to tax. The fact that the primary purpose of the party packages may not be the food items provided does not alter the fact that the charge includes the provision of taxable food.


However, the audit was revised to remove all party package transactions occurring after the issuance of conflicting guidance by the Department of Taxation.

Monumental Minnesota Capital Equipment Changes

The Minnesota Department of Revenue has provided additional information on recent tax law changes that affected:

  • Refund for capital equipment
  • Repeal of the tax on certain repair and maintenance labor
  • Repeal of the tax on warehouse and storage services
  • Reenactment of the exemption on telecommunications equipment


Virginia "Shines" Good News on Green Energy Production

The Virginia Department of Taxation held that a taxpayer involved in the generation of solar energy is entitled to the manufacturing exemption. In addition, any of the equipment used to produce solar energy is also entitled to the exemption.


The taxpayer plans to develop, construct and operate a utility‐scale solar energy generating facility. This facility is not a public service corporation and does not want to have the power of eminent domain.

Nebraska Walks a Fine "Lime" with Use Tax

A limestone mining business’s motor grader that was used to maintain inventory stockpiles qualified for the Nebraska manufacturing machinery and equipment sales and use tax exemption because it was used to maintain the integrity of the product.


The piles were separated according to the gradation of the limestone, and the motor grader maintained the inventory stockpiles by pushing rocks back into the appropriate piles. The motor grader ensured that the rocks remained in the proper piles according to size and that the customers who ordered limestone of a certain size received rocks of the right gradation.

Ohio Rains on Cloud Services Parade

The taxpayer in this case of on-demand computing is a Cloud Collaboration Service organization. Their offering is sold to businesses, government, education and healthcare customers worldwide. If any of these customers receive benefit of the service in Ohio, there will be tax to pay. In addition, the charges for hosting services are part of the tax base since they are charges necessary to complete the sale and are part of the taxable price.


Missouri's Chummy News for Boatlift Manufacturers

The Missouri Department of Revenue ruled that a boatlift manufacturer's purchases of machinery and equipment used directly in its manufacturing process are not subject to sales tax under the manufacturing exemption. Further, the Department also found that the manufacturer's purchases of materials that become component parts or ingredients of the boatlifts are also exempt from sales tax.

Missouri Deems Tumor Treatments Taxable

The Missouri Department of Revenue recently issued a ruling concerning the taxability of a Taxpayer’s tumor treatment therapy.


The Taxpayer is an oncology company that developed a tumor treatment therapy. The therapy consists of an external treatment device which contains electrodes that are placed on the skin surrounding the tumor. The device will emit electrical currents that will target certain cells (tumor cells) and prevent the spread of such cells, thereby preventing the spread of the tumor.


Per Missouri Code Section 144.030.2(19) – sales of prosthetic devices are exempt from sales tax.

Missouri Green Sales Tax Holiday

Missouri will be holding its annual “Show-Me Green Sales Tax Holiday” for the time period of April 19 - April 25.

During the 7day holiday period, up to $1,500 of the sales price of qualifying energy start certified new appliances will be exempt from tax. This $1,500 threshold will be per appliance. In addition to the state tax exemption for qualifying energy star new appliances, some local tax jurisdictions will also be participating in the sales tax holiday.

Some examples of qualifying energy start new appliances are:
• Clothes washers
• Water heaters
• Dishwashers
• Air conditioners
• Furnaces
• Refrigerators
• Freezers
• Heat pumps

Maryland Sales Tax Holiday Rewards Energy Conservation

Maryland will be having a Sales Tax Holiday for Energy Star Products. The holiday will be from February 15 to February 17, 2014. During this holiday period, the 6% state tax for Maryland will not be assessed on sales of qualifying Energy Star products like:

Air Conditioners
Clothes Washers and dryers
Furnaces, Heat Pumps, and Boilers
Solar Water Heaters
Standard Size Refrigerators
Programmable Thermostats
Compact Flourescent light bulbs

Romanian Reverse Charge Row


In 2007, the taxpayer in this Romanian case hired a supplier to carry out building works that were subject to the reverse charge under Romanian law. Initially the supplier invoiced the taxpayer for advanced payments and did not include any VAT on the invoices. Then the supplier reappraised the value of the work they were providing and issued an invoice for the revised value plus VAT. The taxpayer included this VAT in its VAT return and the tax authority repaid the VAT to the taxpayer after an inspection.

The tax authority carried out a second inspection in 2009 and decided that the taxpayer should not have been repaid for the wrongly charged VAT since the reverse charge should have been applied.

Colorado Bores into Drilling Equipment Taxability

The Colorado Department of Revenue (CDOR) has issued a general information letter to a company (Company) that asked for guidance regarding (1) the applicability of sales and use taxes to structures built and used in oil and gas drilling and (2) the tax treatment of the machinery it used in its operations.


The Company provides equipment and services necessary to drill and install holes at oil and gas well sites. In order to facilitate well production the Company uses specialized equipment purchased from a manufacturer outside Colorado. This mobile drilling unit is capable of being moved between locations without being hauled piece by piece.

Indiana Gives Car Dealers Course Correction on GPS Software Taxability

A car dealership’s purchases of web-based information platforms and software used in different functions, like navigation systems, recently came under scrutiny. The devil as always is in the details, or in this case the line items on the invoice.


For this particular dealership, the fact they did not sufficiently detail the transaction made them liable for use tax on the software, which is defined as taxable tangible personal property.

A taxpayer bears the burden of establishing that a proposed tax assessment is incorrect. Also, prewritten computer software is taxable.

In addition, GPS units installed by the dealership on vehicles it sold were subject to use tax, and not exempt under the sale for resale exemption, as the GPS units were not listed separately from the vehicles on the sales invoices.

Alabama Tax Breaks Help Consumers Weather the Storms

Alabama will be holding its annual Severe Weather Preparedness Sales Tax Holiday beginning Friday, February 21, and ending on Sunday, February 23.

During the holiday period Consumers will be able to purchase certain severe weather preparedness supplies costing less than $60, and portable generators less than $1000 free of state sales tax.

Some local tax jurisdictions will also be participating in the sales tax holiday, thus Consumers will also be able to take advantage of sales tax exemptions in many Alabama local jurisdictions. Some examples of items that can be purchased free of sales tax are:

Oklahoma Software Support Sails by on Exemption

A Tulsa based company (Company) sells to small and medium sized businesses class servers and software, and provides technical support and consulting services for those products.


The Company specifically specialize in selling computer hardware and software products typically classified as Server Operating Systems, Server Databases, Network Infrastructure management, Groupware, Collaboration, Web Infrastructure, etc. These are the types of software products that businesses use to build and support their internal data processing infrastructure.

The initial sales price for their Software product includes a license to use the software itself, plus a one year “Software Subscription and Support” agreement.

Minnesota Migrates from Exempt Storage

The Minnesota Department of Revenue has issued Sales Tax Fact Sheet 178 stating that business related storage and warehousing services will be subject to Sales and Use tax effective April 1, 2014.

Storage and warehousing facilities take responsibility for storing goods and keeping them secure. They do not sell the goods they handle. All logistical services (i.e. labeling, breaking down bulk products, inventory control, etc.) associated with taxable storage are also taxable.

There are exemptions of certain specified storage services relative to agricultural products, refrigerated storage, electronic data storage, and other special circumstances.

UK Looks at the Negatives of Amusement Park Photography

In this UK case, the Appellant approaches individual groups of visitors as they arrive at the entrances to tourist attractions and takes photographs of them as they arrive. They superimpose backgrounds of different themes of the attraction on the photographs, print them and insert them into a photo book.

The question posed to the HMRC is whether these sales are photographs or photo books and whether this is a good or a service.

The photo-books are displayed close to the exit of the site and are available for purchase by the visitors. The Appellant has a sales staff that will show the photo-books to the visitors. In addition to the photographs the photo-books also contain information and educational elements.

Utah Raining Tax from the Cloud

In a private letter ruling, the Utah State Tax Commission determined that the taxpayer's sales of Cloud-based applications and related services ("Offering") to Utah customers are subject to state sales tax under Utah Code Ann.§ 59-12-103(1)(a).


The taxpayer provides Cloud-based applications and related services. These services replace certain customer owned and maintained software applications and related computer hardware on out-of-state servers for telecommunications.

The taxpayer's customers were able to utilize the Cloud on an as-needed basis from the taxpayer, thereby reducing capital investment and ongoing technology support and maintenance expenditures for such systems.

IP Addresses Serve for Sourcing in Missouri

The Missouri Department of Revenue ruled that a telecommunications services provider that employs Voice over Internet Protocol (VOIP) technologies may use a customer's registering IP address for sourcing purposes in the application of sales tax.

This law is in compliance with Missouri statutes since the sale of its subscription-based and prepaid credit telecommunication services is delivered to the customer at the time payment is remitted.

The tax itself is not itemized on the statement but the service provider notifies the customer in an online invoice that taxes are included in the price of each of its offered telecommunications services. The service provider separately accounts for sales tax collected in its books and records.

UK Thieves Tax the Tax Man (and store owners)

The Appellant in this UK case is a retail group that supplies electrical and similar goods in their retail locations and over the internet. They accept the credit cards as a form of payment and have an agreement with American Express (Amex) and Streamline who processes cards issued by other banks.

In both cases, Amex and Streamline pay the Appellant the amount of completed transactions less certain fees. At issue are transactions where payment is made by credit card that is approved but later found to have been fraudulently used by someone who is not the cardholder.

Colorado "Tears" Into Software Licensing

A general information letter issued by the Colorado Department of Revenue explains that a software license renewal fee for continuing use of prewritten, canned software is subject to sales or use taxes when the original license was delivered through a tangible medium.

The Company is a supplier of tax compliance software for the telecommunication and utility industries.

The principal issue is whether the client's agreement to the license and the license itself must be on a tangible medium. Company obtains clients' agreement to the license by electronic means and presumably makes the license available for viewing by electronic means.