Colorado Appellate Court Rules Online Streaming Subscriptions Taxable as Tangible Personal Property
In a recent decision, the Colorado Court of Appeals reversed a lower court ruling, determining that online streaming subscriptions qualify as taxable tangible personal property under Colorado sales tax law. The court interpreted “tangible personal property” as encompassing items perceivable by any of the senses, not limited to touch. The taxpayer in this case provided subscriptions for unlimited access to a library of digital movies, shows, and games for a monthly fee, which the court deemed corporeal property. This ruling applies to past periods, prior to amendments clarifying that digital goods fall under the definition of tangible personal property for tax purposes, regardless of the delivery method.
Florida: Repeal of Business Rent Tax
Effective October 1, 2025, Florida will eliminate the state and local sales tax on commercial rent, commonly known as the business rent tax, as outlined in H.B. 7031, signed into law on June 30, 2025.
Illinois: New Rule Changes for Retailers’ Tax Sourcing
The Illinois Department of Revenue has adopted rule changes that shift certain retailers to a destination-based sourcing model for sales made to Illinois customers from outside the state, effective January 1, 2025. This change aligns with legislation enacted in 2024, affecting how sales and use taxes are applied to leases of tangible personal property.
Kentucky: Taxability of Tariffs Clarified
The Kentucky Department of Revenue has clarified that tariffs passed on to consumers as part of retail sales are subject to sales and use tax as part of gross receipts. This clarification follows increased inquiries on the impact of tariffs on sales tax, as outlined in Ky. Rev. Stat. section 139.010.
Louisiana: Definition and Sourcing Rules for Drop Shipment Sales
A new law in Louisiana defines “drop shipment sales” and establishes special sourcing rules for these transactions, effective immediately as of July 1, 2025. This law allows sales where only the title transfers in Louisiana to be sourced there, regardless of where possession occurs.
Maryland: New 3% Sales Tax on IT and Data Services
Starting July 1, 2025, Maryland will impose a 3% sales tax on certain information technology and data services. The Maryland Comptroller has issued guidance on this new tax and clarified that no exemptions exist for sales made to affiliated companies.
Ohio: Budget Bill Changes Affecting Sales Tax Exemptions
Ohio’s recently enacted budget bill, effective January 1, 2026, repeals several sales and use tax exemptions and caps vendor discounts. Key changes include the elimination of exemptions related to electronic publishing and direct marketing vendors.
Tennessee: Updated Tax Manual on Tariffs
Tennessee’s Department of Revenue has updated its sales and use tax manual to provide guidance on the taxability of tariffs. The manual specifies that if a business passes along a tariff when selling a good, it becomes part of the taxable sales price unless separately stated and paid by the consumer upon importing the good.
Source Deloitte
