A multi-state tax coordination group is being asked to change the timing for collecting taxes on products with digital codes, including the sale of codes delivered via non-fungible tokens and electronically delivered software.
The proposal aims to modify the Streamlined Sales and Use Tax Agreement’s look-through rule for digital codes, expanding its application beyond “specified digital products.” The rule adjusts the timing of tax collection, shifting it to when the digital code is delivered to the customer, rather than upon physical delivery of the product. The rationale behind the rule is that there typically is no financial transaction at the …