Overview
The Pennsylvania Board of Finance and Revenue recently reviewed petitions from One Market Data LLC, which contested the revocation of its sales tax license and the assessment of taxes, penalties, and interest for the period between January 2020 and December 2022. The company argued that its services were not subject to sales tax under Pennsylvania law.
Board’s Decision
Following a detailed review, the Board determined that One Market Data LLC’s services—including installation, setup, and training related to licensed software—qualified as taxable cloud computing and support services for canned computer software.
As a result:
- The Board upheld the tax assessment.
- The Board denied the company’s request for interest abatement.
- Since the company had paid its outstanding tax liabilities, the Board agreed to reinstate its sales tax license, provided no additional tax liabilities remained.
Key Implications
This ruling highlights:
- The complexities of distinguishing between taxable and non-taxable services in the tech industry.
- The importance of compliance with Pennsylvania’s tax regulations.
(BF&R Docket Nos. 2317877 and 2317876, Pennsylvania Board of Finance and Revenue, June 28, 2024)
Frequently Asked Questions
What was One Market Data LLC’s main argument against the tax assessment?
One Market Data LLC argued that its services, including installation, setup, and training related to software, were not subject to sales tax under Pennsylvania law.
Why did the Pennsylvania Board of Finance and Revenue uphold the tax assessment?
The Board determined that the company’s services fell under taxable cloud computing and support services for canned computer software, which are subject to sales tax in Pennsylvania.
What was the outcome regarding the company’s sales tax license?
The Board agreed to reinstate One Market Data LLC’s sales tax license since the company had paid all outstanding tax liabilities and no new ones were pending.
Did the Board grant interest abatement on the assessed taxes?
No, the Board denied One Market Data LLC’s request for interest abatement, meaning the company is still liable for interest on the assessed taxes.
What broader implications does this ruling have for tech companies?
This decision underscores the need for tech companies to carefully evaluate how their services are categorized under state tax laws and to remain vigilant about compliance with sales tax obligations.