Texas Ruling Highlights Risks of Outdated Tax Standards for Digital and Technology Service Providers

• Texas Comptroller’s recent decision misapplies outdated legal standards, increasing tax burdens for digital service providers.
• The ruling incorrectly categorizes all website-related services as taxable data processing, ignoring distinctions in Texas law.
• The decision imposes an obsolete “contemporaneous” documentation standard instead of the current “sufficient” standard.
• Outdated multistate benefit rules were applied, potentially affecting tax allocation for services used outside Texas.
• These misapplications could improperly increase tax exposure for businesses purchasing or providing digital services in Texas.

Source: dmainc.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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