Knowledge Center

Tuesday, June 30, 2015

HMB's Marilyn Wethekam Quoted in Tax Analysts on Taxation of Digital Goods and Concomitant Risks

"Taxation of Digital Goods Has Improved, but
Risks Remain"

Tax Analysts, June 30, 2015

By David Sawyer

Though many states have begun to provide guidance for the taxation of digital goods through legislative means, many challenges for sellers remain as revenue departments stretch their taxing authority and the threat of consumer class action suits looms.

According to Marilyn Wethekam of Horwood Marcus & Berk Chtd., whether a seller chooses to impose sales tax on those [digital goods] transactions can put companies in a difficult situation, exposing them to the risk of class action or qui tam suits or audits. An audit may often wind up to be much less expensive, she said.

Wethekam also said that some tax authorities have begun to use their amusement tax provisions to seek to impose tax on various digital goods, including training services, webinars, and streaming services of all types. For instance, she said, Chicago recently issued guidance seeking to impose that tax on streaming music and video services.

Copyright 2015 Tax Analysts. Reprinted with permission.

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