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Mark Yopp

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State legislators have already proposed a number of digital and data tax bills in 2021, some of which are new proposals while others reintroduce proposals from previous legislative sessions.  The proposed bills fall into one of three categories: taxes on digital advertising services, taxes (or fees) targeting social media providers, and taxes on the sale or monetization of personal data.  Most of the proposals are in the early stages, but a Maryland bill originally introduced last year is moving closer to a legislative vote on whether to override the governor’s veto.

On November 30, 2020, Canada’s Minister of Finance announced, as part of the government’s Fall Economic Statement (available here), proposals to amend Canada’s GST/HST system with respect to non-residents, proposed to come into effect July 1, 2021 and to tax non-resident digital service providers. The government has invited comments on the GST/HST proposals (including draft legislation) by February 1, 2021. The GST/HST proposals are broadly in line with changes that have recently become effective or are proposed to come into effect at the provincial level, requiring non-residents to register for and collect provincial taxes. Such changes are generally designed to target the digital economy. This article provides a high-level overview of these changes.

Washington legislators may introduce a digital advertising tax bill in the state’s upcoming legislative session.  See H-0028.1 (advance copy; not yet introduced).  Washington’s potential legislation is the latest in a recent trend of digital advertising tax proposals (including in the District of Columbia, Maryland, Nebraska, New York, and West Virginia, none of which have become law as of the date of this blog post).

The New York State Department of Taxation and Finance (“Department”) recently published guidance stating that a nonresident’s income will be sourced to New York State unless the nonresident’s remote work location meets the “bona fide employer office” exception to the “convenience of the employer test.”  Specifically, the Department addressed a question in its FAQs regarding how to source income for Personal Income Tax purposes where a nonresident’s primary office is in New York, but the…