The next wave of digital innovation is telematics, or the "Internet of Things" and represents one of the fastest growing sectors of the Internet and our economy,Michael T. Dillon, Esq., founder and President of Dillon Tax Consulting, LLC, writes in this week's issue of the Bloomberg BNA Weekly State Tax Report .
While the majority of states have taken a position on the taxability of digital products and services, fewer have provided guidance on the taxability of cloud-based products and services, he writes.
"It is likely then, that sales tax guidance on the newest technological advancements may be a long time coming," Dillon says.
Additionally, some of the early predictions as to how states will classify and tax it hinge on a federal law, the future of which is also currently cloudy-the Internet Tax Freedom Act (ITFA). Bloomberg BNA State Tax Law Editor Ean Hamilton's interview with Dillon on whether the IFTA will prohibit states from taxing the "Internet of Things" can be read here .
Dillon's article, which can be read here , provides a brief overview of the state tax issues raised by telematics and identifies the major components and players in the area. Dillon also includes examples to illustrate the tax result for different types of transactions and provides practical insights to help practitioners determine the correct amount of tax owed.
Continue the discussion on Bloomberg BNA's State Tax group on LinkedIn : Does your state provide adequate guidance on the application of sales tax to services, such as cloud computing?
For more information about this and other state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library.
In other developments…
Improving State Revenue Forecasting: Best Practices for a More Trusted and Reliable Revenue Estimate , by the Center on Budget and Policy Priorities
Compiled by Priya D. Nair
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