Navigating the Complex Tax Landscape of Digital Products and Services in the U.S.

• US states are increasingly taxing services by expanding their tax base or defining services as tangible personal property.
• The taxability of digital goods varies by state, with ongoing litigation about classifying offerings as products or services.
• Colorado Court of Appeals ruled Netflix’s streaming services as taxable physical goods, aligning with other digital goods taxation.
• Colorado and some states have “home rule” jurisdictions allowing cities to set local tax policies, causing taxability differences.
• Maryland’s digital advertising tax faces lawsuits over its constitutionality, with a recent court ruling against restrictions on passing the tax to businesses.
• Businesses with digital offerings should consult tax professionals to understand potential sales tax obligations.

Source: taxand.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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