As traditional sources of state tax revenues continue to decline, more jurisdictions are turning their eyes to the digital economy.
Digital products and services traditionally have escaped the sales tax nexus, but the tide is turning. Several states have instituted new taxes on digital advertising and media in the past few years. Because other states are likely to follow, the adoption of these new taxes could quickly gain momentum, as did e-commerce sales taxes after the South Dakota v. Wayfair case.
Organizations that operate in the digital economy should now monitor the states in which they operate and assess their potential exposure to new tax liabilities.