Recently passed budget legislation in both Connecticut and Rhode Island included tax increases on sales of digital goods and services. The Connecticut bill has been signed into law. The Rhode Island bill passed late last night awaits executive action. Below are brief summaries of the impacts of these bills on the sales taxation of digital goods and services (assuming the Rhode Island governor signs the bill) beginning October 1, 2019. Connecticut Governor Ned Lamont (D) signed the Connecticut budget bill (HB 7424) into law in early June. The bill contains language increasing the sales and use tax rate on most digital goods and services from the current 1% rate to the full 6.35% rate beginning October 1, 2019. See Sections 319-322 (starting on page 460 of the Public Act). Specifically, these provisions expand the definition of “tangible personal property” for sales and use tax purposes so they include: (1) “digital goods” and (2) “canned or prewritten software...

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