Washington Board Rules CDN Services Exempt from Sales Tax as Digital Automated Service

• Washington Board of Tax Appeals ruled that content delivery network services are not subject to sales tax as a digital automated service.
• The ruling was based on the exclusion for the storage of digital content and software.
• States are expanding sales tax bases, especially for technology-related services, requiring attention to new service definitions and sourcing rules.
• Aprio’s State and Local Tax team offers guidance on taxability and sourcing rules to ensure compliance.
• Content delivery networks are distributed networks of servers that store and deliver content to users, improving website loading speeds.
• The Washington Department of Revenue initially classified CDN services as a taxable digital automated service.
• The taxpayer argued that CDN services met exclusions for internet access and mere storage of digital products.
• The Board rejected the internet access exclusion but accepted the mere storage exclusion, finding the Department’s interpretation too narrow.

Source: aprio.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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