Private Letter Ruling PLR 21-005, Colo. Dept. of Rev. (7/21/21). A Colorado Department of Revenue (Department) private letter ruling addresses the taxability of on-demand digital courses (i.e., streaming video lessons) provided by an online virtual learning platform, concluding that its learning plan products are subject to Colorado and Colorado-administered local sales taxation as mixed transactions that are “more analogous to the sale of tangible personal property.” In doing so, the Department reasons that, under the facts, what makes the provider’s platform subscription valuable is “access to the preproduced videos and accompanying transcripts” and that “when viewed as a whole” the learning plan products are more akin to tangible personal property. Additionally, the Department concludes that the company’s internet advertising revenue from its “pay-per-click model” and the fulfilling of insertion orders is not subject to Colorado or Colorado-administered local sales tax because “advertising services, like most services in Colorado, are generally not subject to sales or use tax.”
Source Deloitte
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