Mark Nebergall

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Mark Nebergall advises clients on all aspects of tax policy with respect to software transactions at state, federal and international levels. He also works with McDermott’s tax controversy team handling tax litigation where he brings his former experience as a litigator for the US Department of Justice, Tax Division. Mark combines tax policy and tax litigation skills to help solve client tax problems holistically. Read Mark Nebergall's full bio. 

Generative AI chatbot service not subject to Indiana sales tax


By , and on Aug 28, 2025
Posted In Indiana, Local Tax, Nationwide Importance, Sales Tax

In one of the first pieces of administrative guidance addressing the sales tax treatment of generative artificial intelligence (AI) services, the Indiana Department of Revenue (DOR) recently issued a revenue ruling confirming that charges for a generative AI chatbot service are not subject to Indiana sales tax. In reaching its conclusion, the Indiana DOR used...

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Fourth Circuit strikes down Maryland’s digital ad tax “pass-through” ban


By , and on Aug 19, 2025
Posted In Allocation/Apportionment, Constitutional Issues, Maryland, Nationwide Importance, Sales Tax, Tax Base

Maryland’s attempt to stop businesses from telling customers about a controversial tax has hit a constitutional wall. On August 15, 2025, the US Court of Appeals for the Fourth Circuit ruled that the state’s “pass-through” provision in its Digital Advertising Gross Revenues Tax violates the First Amendment. In Chamber of Commerce et al. v. Lierman,...

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Washington’s advertising services tax: Sourcing rules clear as mud


By , and on Aug 12, 2025
Posted In Allocation/Apportionment, Constitutional Issues, Nationwide Importance, Sales Tax, Tax Base, Washington

Washington’s sales tax on advertising services takes effect October 1, 2025, and comes in two forms: a tax on digital automated services and a tax on retail sales of advertising services. Both impositions apply to digital advertising services delivered using the internet. This makes Washington an outlier as currently only two other states impose a...

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Maryland sales tax multiple points of use exemptions: Is the juice worth the squeeze?


By , and on Jun 27, 2025
Posted In Allocation/Apportionment, Maryland, Nationwide Importance, Sales Tax, Tax Base

In the waning days of its 2025 session, the Maryland Legislature passed the Budget Reconciliation and Financing Act, and Governor Wes Moore signed it into law.[1] This bill expands the sales tax base to include sales of various data and information technology and cloud computing services.[2] The sales tax rate on these new categories of...

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Washington’s Digital Ad Tax Enacted: Is Litigation Now Inevitable?


By , and on May 21, 2025
Posted In Allocation/Apportionment, Constitutional Issues, Nationwide Importance, Sales Tax, Tax Base, Washington

On May 20, 2025, Washington Governor Bob Ferguson signed into law Senate Bill (SB) 5814, a sweeping tax bill that expands Washington’s retail sales and use tax to digital advertising services and a range of high-tech and IT services. The new law takes effect for sales occurring on and after October 1, 2025. As we...

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Washington’s Digital Ad Tax: A Lawsuit Waiting To Happen?


By , and on May 1, 2025
Posted In Allocation/Apportionment, Constitutional Issues, Nationwide Importance, Sales Tax, Tax Base, Washington

On April 27, 2025, the Washington Legislature delivered to Governor Bob Ferguson’s desk Senate Bill (SB) 5814, a sweeping tax bill that, among other changes, would expand the state’s retail sales and use tax to sales of digital advertising services and a range of high-tech and IT services. The bill now awaits the governor’s signature,...

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Let the Shakedowns Begin: Tax False Claims Legislation in California


By , and on Apr 22, 2025
Posted In California, Constitutional Issues, False Claims Act, Nationwide Importance

Legislators in Sacramento, California, are mulling over one of the most (if not the most) troubling state and local tax bills of the past decade. Senate Bill (SB) 799, introduced earlier this year and recently amended, would expand the California False Claims Act (CFCA) by removing the “tax bar,” a prohibition that exists in the...

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Kentucky Legislature Ends Judicial Deference To State Agencies


By , , and on Apr 2, 2025
Posted In Kentucky, Nationwide Importance

In a realignment of judicial review standards, the Kentucky General Assembly overrode Governor Andy Beshear’s (D-KY) veto of Senate Bill (SB) 84, effectively abolishing judicial deference to all agency interpretations of statutes and regulations. This development marks a shift in administrative law in the Commonwealth. A RESPONSE TO CHEVRON AND TO KENTUCKY COURTS SB 84...

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Texas Comptroller Proposes Rule Changes Cementing Tax on 130% of Marketplace Sales


By , and on Sep 17, 2024
Posted In Audits, Nationwide Importance, Sales Tax, Tax Base, Texas, Transaction Taxes

In a controversial move, the Texas Comptroller is poised to amend Rule 3.330, Data Processing Services, effectively rewriting the rules to favor the contentious stance it has adopted in recent audits and litigation. This proposed amendment, which aims to cement the aggressive stance the Comptroller has taken in audits and litigation that a marketplace provider’s...

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California Legislator Considers Digital Advertising Tax


By , , and on Mar 29, 2024
Posted In Allocation/Apportionment, California, Constitutional Issues, Nationwide Importance, Sales Tax, Tax Base, Transaction Taxes

Senator Steven Glazer, chair of the California State Senate Revenue and Tax Committee, is treating data like the next gold rush and taking bold steps to mine this new vein of wealth with his proposed “Digital Data Extraction Tax Law.” While couched as a tax on “data extraction,” the base for the tax is digital...

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