On Wednesday, SIIA filed an Amicus Curiae Brief in support of Thompson Reuters in its appeal to the Treasury Department of the state of Michigan. At issue in the case is whether an information service, accessed online via the Internet, is subject to Michigan use tax.
In the brief, SIIA concurs with Thomson Reuters’ assertion that providing an information service online does not constitute delivery of tangible personal property, different from providing a service either via CD-Rom or some other tangible form, and is thus immune to Michigan’s use tax. Drawing on our technical knowledge about online services, and our experience speaking on behalf of the software and digital content industries, SIIA’s brief demonstrates that the MI Treasury Department’s tax treatment of CheckPoint is based on a fundamental misunderstanding of the nature of online services.
As highlighted in the brief, SIIA provides education about the fundamental physical and conceptual distinctions between various operations such as selling software, providing online services, or providing digital content. It is critical that law impacting online services be developed and implemented with a full understanding of the Internet’s function as a platform for selling products and for providing services. Tax law surrounding information services should be interpreted in a way that is uniform, consistent and constitutional.
The next step in the case will be oral argument before a panel of three judges, which is generally scheduled 9-12 months after the last brief is filed.
David LeDuc is Senior Director, Public Policy at SIIA. He focuses on e-commerce, privacy, cyber security, cloud computing, open standards, e-government and information policy. Follow the SIIA public policy team on Twitter at @SIIAPolicy.