Services and Tangible Personal Property (TPP)
Posted November 23, 2018
Public Law 86-272 protects TPP as we previously mentioned. But services are fair game for states to tax. Generally speaking states do not impose a sales tax on services but they can impose a franchise, business or privilege tax.
To make things more interesting, the definition of a service is expanding in light of ecommerce and cloud computing. For example, most states characterize cloud computing as a sale of intangibles or services, but Utah considers cloud computing as the sale, lease or license of TPP. Subtle difference, yet important.
Taxpayer’s Comprehensive Guide to LLCs and S Corps : 2019 Edition
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