Digital goods and services for business purposes

From the 2024 DOR Tax Exemption Study

82.08.0208(3); 82.12.0208(6) - Digital goods and services for business purposes Description Sales of digital goods, or services rendered in respect to digital goods, that are sold to a business solely for business purposes are exempt from sales and use taxes. Purpose To promote uniformity and consistency in the tax code. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.691 $0.717 $0.743 $0.769 Local Taxes $0.311 $0.323 $0.334 $0.346 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.657 $0.743 $0.769 Local Taxes $0.000 $0.296 $0.334 $0.346 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Growth rate mirrors the retail sales growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. - Local revenue estimates use the statewide average local sales and use taxes rate of 2.92%. Data Sources - Department of Revenue, Excise tax data - Economic Revenue and Forecast Council, March 2023 Additional Additional Information Information Catego