Yesterday Governor Gavin Newsom turned to a familiar gambit from California’s playbook to help tackle the budgetary hole wrought by COVID-19. In January, the Governor proposed his budget for the 2020-2021 fiscal year, which projected a $5.6 billion surplus. Indeed, revenues through March are reported as having run $1.35 billion above projections. But, as the

The debate over state marketplace laws may resume again, after the Uniform Law Commission (ULC) announced it has set up a committee to study whether to draft a uniform state law on online sales tax collection, focusing on marketplaces. The study committee is chaired by Utah Sen. Lyle Hillyard. The lead staffer (“reporter”) will be Professor Adam Thimmesch of the University of Nebraska College of Law. The members of the committee are listed here and information to sign up to be notified of developments is available here.

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On April 13, S. 8166 was introduced in the New York Senate, which would expand the sales tax base to include receipts from the sale of digital advertising services. The bill would dedicate the revenue raised to student loan relief.

As introduced, “digital advertising services” would be broadly defined as “advertisement services on a digital

In late March, we wrote an open letter to state tax administrators requesting that they take steps to relieve undue tax administration burdens in the wake of the COVID-19 situation. We gave five suggestions, including postponing deadlines for tax filing and payment, waiving requirements to use hard-copy documents or checks, suspending accrual of interest on assessments during mandatory closures, directing revenue agencies to resolve outstanding controversies, and disregarding remote work for tax purposes.

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This week we wrote a letter to state tax administrators, sharing five key suggestions for relieving undue tax administration burdens in the wake of this difficult COVID-19 situation. As explained, “at a time when many people are working from home and should not or cannot go to post offices or banks, a business-as-usual attitude for tax administration would be inexcusable.” The five suggestions:

  1. Postpone deadlines for tax filing and payment. The federal government and many states have already taken this needed step. When many Americans, including business tax professionals and tax administrators and their staffs, are fearing for their own health and unable, prohibited or unadvised to leave their own house, this is not the time for pulling records and preparing tax filings.
  1. Waive requirements to file hard copy, notarized, and/or wet-signature documents. Waive requirements to mail documents by certified mail. Allow automated-clearing-house (ACH) electronic transfers of funds instead of requiring hard checks. In a time of social distancing and shelter-in-place orders, it is dangerous to require that business representatives go outside to banks or Post Offices, stand in line, and purchase services from one particular provider. While the US Postal Service (USPS) has valiantly endeavored to keep all post offices operating and mail delivery uninterrupted, new reports on the enormous financial difficulties of the USPS and the growing impact of the virus on the USPS’s public-facing workforce surely give all of us pause. Digital signatures and electronic document delivery, and electronic forms of payment, are widely adopted, affordable, secure, and instantaneous. It is time for tax authorities to dispense with – or suspend – the requirements of physical copies, wet signatures, notarization, physical checks and mailing. Furthermore, tax agencies and hearing tribunals should adopt temporary procedures to either automatically acknowledge receipt of electronic documents or waive stringent proof of delivery in situations in which missing a deadline would preclude a taxpayer from obtaining further review of agency action.


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Illinois has announced the following tax-related relief measures related to COVID-19. Taxpayers who file quarterly estimated returns should note that unlike the federal government, Illinois has not extended the April 15, 2020 due date for first quarter estimated tax payments.

I. Extension of Filing and Payment Deadlines for Illinois Income Tax Returns

The 2019 income

From coast to coast, both state and local tax authorities are rapidly responding to the Coronavirus (COVID-19). And while many of the relief efforts are appropriately aimed at supporting individuals who have been impacted by COVID-19, recent pronouncements from local leaders demonstrate that cities are also eager to implement measures supporting small businesses within their communities.

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On January 16, a bill (H. 756) was introduced in the Vermont Assembly that would repeal the sales and use tax exemption for remotely accessed prewritten computer software. If enacted as introduced, the exemption would no longer protect Vermont taxpayers from this legally suspect tax beginning July 1, 2020.

This is not the first time the Vermont Legislature has considered the issue of taxing cloud software. After the Department of Taxes administratively issued guidance interpreting the sales tax to apply to all prewritten software (including cloud-based software) in 2010, legislative actions were taken to curtail this administrative overreach—including a 2012 temporary moratorium and the aforementioned 2015 exemption—to preclude the imposition of sales tax on the mere accessing of prewritten computer software.

Practice Note: With the introduction of H. 756, Vermont is at risk of reverting back to the dark ages of cloud tax uncertainty that existed throughout the first half of the past decade. As noted below, there are substantial policy and legal flaws with this proposal that counsel against repeal of the exemption. Vermont Legislative Counsel estimates that repealing the sales tax exemption for cloud software would generate six to seven million dollars of revenue in FY 2021—hardly enough to justify the additional administrative complexities and disputes that will arise on audit (and potential litigation arising therefrom). Specifically, even if the cloud tax exemption is repealed, substantial uncertainty remains under Vermont law as to whether there is sufficient authority to impose sales or use tax on cloud service providers. Disturbing the existing certainty created under current law will take Vermont from one of the most favorable jurisdictions to do business in United States to one of the worst from a cloud service provider point of view. In a world where relocation can be accomplished at the click of a button, Vermont would be putting itself at a disadvantage over its neighboring states and incentivize new and relocating businesses to avoid consumption in Vermont in favor of states with more favorable (and more certain) tax laws.
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On January 14, LB 989 was introduced in the Nebraska Legislature, which would impose sales and use tax on “the retail sale of digital advertisements.” The bill defines “digital advertisement” as “an advertising message delivered over the Internet that markets or promotes a particular good, service, or political candidate or message” (see pages 5-6 of

On January 8, SB 2 was introduced to establish a new digital advertising gross revenue tax of up to 10% on “annual gross revenues of a person derived from digital advertising services in the state.” This uncharted new tax would make Maryland the first state or locality in the United States to impose a targeted