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Services and Tangible Personal Property (TPP)

Article ID: 380
Last updated: 23 Nov, 2018
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By Jason Watson ()
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.

Let’s say what you do is a service. What is the standard for determining nexus for your business? Read on please.

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