Utah State Tax Commission Rules on Sales Tax Liability for Streaming Service Subscription Fees

• The Utah State Tax Commission determined that a taxpayer was liable for sales and use tax on subscription fees for streaming services.
• The taxpayer had been collecting and remitting sales tax but stopped after legislation was repealed.
• The Division argued that the subscription fees were taxable as “products transferred electronically” and that the entire subscription fee was taxable as a “bundled transaction” because of the offline-download feature.
• The Commission disagreed with the Division’s first argument and agreed with the taxpayer that sales tax was not imposed on streaming transactions during the audit period.
• The Commission considered the Division’s alternative argument and found that the offline-download feature was not provided free of charge, making it a taxable “bundled transaction.”
• The taxpayer’s platform with online and offline viewing was determined to be taxable.

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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