Digital goods and services for multiple points of use

From the 2024 DOR Tax Exemption Study

Det. No. 16-0374, 38 WTD 208 (October 7, 2019) 208 Cite as Det. No. 16-0374, 38 WTD 208 (2019) BEFORE THE ADMINISTRATIVE REVIEW AND HEARINGS DIVISION DEPARTMENT OF REVENUE STATE OF WASHINGTON In the Matter of the Petition for Refund of ) D E T E R M I N A T I O N ) ) No. 16-0374 ) . . . ) Registration No. . . . ) RULE 15503; RCW 82.04.050(8); RCW 82.12.020(1)(e); RCW 82.04.192(3): RETAIL SALE – USE TAX – DIGITAL AUTOMATED SERVICES – DATA PROCESSING SERVICES. A service transferred electronically that uses one or more software applications, costs 1.6% of gross sales, and provides inventory management, communications, analytics, and point of sale reporting, is a digital automated service, rather than a data processing service, and is subject to use tax. Headnotes are provided as a convenience for the reader and are not in any way a part of the decision or in any way to be used in construing or interpreting this Determination. Margolis, T.R.O. – A retailer of recorded movies and music (Taxpayer) seeks a refund of use tax paid on services purchased from an application service provider. We deny the petition. 1 ISSUE Whether, under RCW 82.04.050(8) and RCW 82.12.020(1)(e), Taxpayer is sub