Sales taxation of information services and data processing


The transfer or processing of information long has been difficult for state tax administrators to classify and tax properly, with technology creating an ever-changing paradigm for business operations. As a result, a taxpayer engaged in transferring information may incur a different sales tax treatment in each state in which it conducts business. The same transaction may be classified as an information service in one state and classified as data processing in another state. This article examines the current sales tax treatment for this activity in various states.

Return to Tax research and insights
State and Local Tax