Washington

The Washington Department of Revenue issued guidance on the taxation of transactions that involve non-fungible tokens (NFTs), stating that the strength of the digital code in such a transaction, the underlying components, and the identity of the parties to the transaction will be assessed when determining the proper tax treatment; NFT sellers must keep documentation indicating the time and place of the sale and all records necessary to establish the taxability of the transaction.

Washington DOR Issues Guidance on Non-fungible Token Taxation

Tax Analysts provides news, analysis, and commentary on tax-related topics, including tax compliance. Taxpayer compliance broadly refers to the obligation of an individual, employer, corporation, partnership, estate, trust, organization, or other entity to file accurate returns and pay taxes by specified deadlines. The tax compliance area also includes an ever-increasing variety of information reporting requirements for individuals and businesses.

One measure of taxpayer compliance is the so-called tax gap, which the Internal Revenue Service (IRS) defines as “the difference between the estimated amount taxpayers owe and the amount they voluntarily and timely pay for a tax year.” (Treasury Inspector General for Tax Administration (TIGTA), “<a href="/exempt-organization-tax-review/tax-system-administration/tigta-semiannual-report-congress-summarizes-achievements/2015/02/01/9512246">Semiannual Report to Congress: April 1, 2014 – September 30, 2014</a>” (Dec. 2014)). That calculation generally includes estimates of unfiled returns and lost revenues.

Federal, state, and international tax authorities enforce tax compliance initiatives through audits (the review or examination of financial information and accounts), revenue collection, and criminal investigations. Nonfiling of returns, underreporting of income, or underpayment of taxes will result in the assessment of penalties and additions to tax, as detailed in court opinions and IRS and Treasury documents published by Tax Analysts.

Tax Analysts also covers tax compliance initiatives involving offshore financial activity, such as enforcement of the Foreign Account Tax Compliance Act (FATCA) and the negotiation of treaty provisions and intergovernmental agreements governing the exchange of tax-related information between countries. Tax Analysts news stories and commentary also address another other efforts to stop international tax evasion, such as through implementation of the common reporting standard – the OECD’s corollary to FATCA.

Compliance

Cryptocurrency

Digital economy

Tax Analysts contains news, analysis, and commentary on electronic commerce taxation, including examination of the implications of online sales, online services, and digital goods. Tax Analysts’ news and analysis coverage of electronic commerce taxation includes federal, domestic U.S. <a href="/state-tax-today/online-sales-taxation/michigan-governor-signs-amazon-law/2015/01/16/7586006" target="_blank">state developments</a>, and <a href="/worldwide-tax-daily/value-added-tax/tax-practitioners-london-conference-contemplate-future-vat/2015/02/04/9513916" target="_blank">international</a> of how <a href="/worldwide-tax-daily/value-added-tax/russia-clarifies-vat-matters/2015/03/10/9864716" target="_blank">issues arise for value-added tax</a>, corporate income tax, state franchise tax, telecommunications tax, and <a href="/document-list/tax-topics/sales-and-use-taxation/sales-and-use-taxation" target="_blank">sales and use tax</a>.

Issues involving electronic commerce that Tax Analysts provides news, analysis, and commentary for include U.S. constitution issues under the due process clause and the commerce clause for <a href="/state-tax-today/electronic-commerce-taxation/us-supreme-court-holds-tia-not-bar-dma-case/2015/03/04/9659796" target="_blank">establishing jurisdiction for states to impose income taxation and for how states can collect sales tax</a>. Coverage includes <a href="/state-tax-today/compliance/us-senators-introduce-marketplace-fairness-act-2015/2015/03/11/9871056" target="_blank">U.S. congressional actions</a>, Internal Revenue Service guidance, and state department of revenue guidance concerning digital goods and services. Articles also address e-commerce tax issues involving how to apportion income from the sale of online services, how electronic commerce effects unitary business issues, and <a href="/beps-expert/base-erosion-and-profit-shifting-beps/jumping-gate-beps-unilateral-actions-weaken-oecds-plan/2015/03/13/16718076" target="_blank">how electronic commerce can establish nexus in states and internationally</a>.

Tax Analysts has provided cutting-edge news, analysis, and commentary on U.S. state, federal, and international treatment of web-hosting services, <a href="/state-tax-today/electronic-commerce-taxation/vermont-bill-would-exempt-cloud-computing-sales-and-use-tax/2015/03/09/9688161" target="_blank">cloud computing</a>, <a href="/worldwide-tax-daily/currency-transactions-and-issues/australian-tax-office-bitcoin-guidance-may-lead-double-taxation/2014/08/22/4527121" target="_blank">electronic currency</a>, <a href="/tax-notes-international/harmonization/news-analysis-france-luxembourg-infringed-eu-vat-law-e-book-sales/2015/03/23/13544921" target="_blank">electronic books</a>, <a href="/state-tax-today/electronic-commerce-tax-issues/netflix-streaming-suits-highlight-tax-tech-mismatch/2014/03/24/146316" target="_blank">electronic music, data processing services, electronic research services</a>, and <a href="/state-tax-today/compliance/goodlatte-circulates-revised-hybrid-origin-sourcing-mfa-alternative/2015/01/15/7508486" target="_blank">remote sellers of tangible personal property</a>. Coverage also includes examinations of the emerging multi-state trend of factor presence nexus through which a state can claim jurisdiction to tax an electronic commerce provider based on its quantity of sales into a state.

Tax Analysts consistently and promptly publishes all relevant developments involving e-commerce taxation issues. To stay up to date on all tax-related topics, subscribe to <a href="/products/news-analysis/federal/detail/tax-notes-today-federal" target="_blank">Tax Notes Today Federal</a>.

Electronic commerce taxation

Tax Analysts contains news, analysis, and commentary on local taxation, including local option sales tax, property tax, and income tax. Local tax issues covered by Tax Analysts include issues at the county, city, and town levels within U.S. states.

Specific local taxation issues that tax analysts has covered includes many property tax cases, <a href="http://www.taxnotes.com/state-tax-today/litigation-and-appeals/california-appeal-court-rejects-use-step-transaction-reassess-leased-property/2015/02/25/9555476" target="_blank">California proposition 13 issues</a>, property valuations, centralized assessment issues, and tangible personal property issues. Tax Analysts also covers <a href="http://www.taxnotes.com/state-tax-today/legislation-and-lawmaking/kentucky-bill-allow-local-option-sales-tax-stalls-senate/2015/03/16/13597651" target="_blank">local option sales tax deliberations</a>, local <a href="http://www.taxnotes.com/state-tax-today/hotel-and-occupancy-tax/georgia-supreme-court-upholds-bonds-and-taxes-fund-stadium/2015/03/17/13597836" target="_blank">development incentives</a>, local <a href="http://www.taxnotes.com/state-tax-today/corporate-taxation/practitioner-says-ohio-uniformity-bill-raises-constitutional-questions/2015/01/28/9507146" target="_blank">income tax</a> and <a href="http://www.taxnotes.com/state-tax-today/litigation-and-appeals/massachusetts-high-court-rejects-satellite-providers-discrimination-claims/2015/02/23/9523441" target="_blank">communications tax</a> impositions, and <a href="http://www.taxnotes.com/state-tax-today/litigation-and-appeals/all-parties-claim-victory-hawaii-supreme-court-otc-case/2015/03/19/13598006" target="_blank">hotel and transient occupancy taxes</a>.

Tax Analysts also provides coverage of some local state income tax issues, including what jurisdictional rules apply to localities and what method localities should use to assess taxpayers’ income in their jurisdiction. Coverage of this issue includes ‘jock tax’ lawsuits filed by <a href="http://www.taxnotes.com/state-tax-notes/individual-income-taxation/ohio-supreme-court-sides-nfl-players-2-local-tax-cases/2015/05/04/14182266" target="_blank">National Football League players in Cleveland, Ohio</a>, challenging that city’s income tax assessment methodology.

Other local taxation specific issues arise in Louisiana where local jurisdictions have the ability to administer their own sales tax system apart from the state level. In particular, some local entities in Louisiana have sought to impose sales tax on <a href="http://www.taxnotes.com/state-tax-today/electronic-commerce-tax-issues/netflix-streaming-suits-highlight-tax-tech-mismatch/2014/03/24/146316" target="_blank">online streaming video services</a> despite the state expressly not subjecting that sort of transaction to sales tax.

Specific coverage of local tax issues has included coverage of a U.S. Supreme Court case concerning the provision of state credits for local taxes paid -- Maryland Comptroller of the Treasury v. Wynne (2013-1931) (2014-29828 and 2015-1546), electronic commerce tax issues involved in centralized assessment in Oregon (2014-23960 and 2015-6990), and transient occupancy tax cases (2015-6544 and 2015-6882).

Local taxation

Tax Analysts publishes news, analysis, documents, and commentary on tax-related practice and procedure issues, including the judicial proceeding rules; preparing and filing information returns and tax returns; making tax elections; accounting method change procedures; the assessment and collection of taxes; and IRS procedures for issuing guidance.

<a href="http://www.taxnotes.com/federal-research-library/internal-revenue-code-1986/sec-6301-collection-authority/9605736" target="_blank">Chapter 64</a> of the Internal Revenue Code provides guidance on the collection of taxes while <a href="http://www.taxnotes.com/federal-research-library/internal-revenue-code-1986/sec-6501-limitations-assessment-and-collection/9607081" target="_blank">chapter 66</a> addresses limitations on assessment and collection; limitations on credit or refund; mitigation of effect of the limitations period; and limitation periods in judicial proceedings. <a href="http://www.taxnotes.com/federal-research-library/internal-revenue-code-1986/sec-7401-authorization/9599591" target="_blank">Chapter 76</a> of the Internal Revenue Code provides guidance on practice and procedures issues regarding civil actions by the United States; proceedings by taxpayers and third parties; Tax Court procedures; and review of Tax Court decisions. Tax Analysts covers numerous court opinions that address those issues.

Tax Analysts publishes IRS guidance, court opinions, and news stories concerning practice and procedures issues on preparing and filing returns, including the time and place for filing and requesting extensions and on how to make various tax elections.

Tax Analysts also publishes IRS revenue procedures, which announce practices and procedures to <a href="http://www.taxnotes.com/federal-research-library/IRS-documents" target="_blank">provide guidance to taxpayers on administrative issues</a>, such as how to file a ruling request or file tax forms electronically and IRS procedures for issuing advice, determination letters, and letter rulings. Other documents covered by Tax Analysts include IRS fact sheets that outline basic information about a specific tax procedure or administrative topic. &nbsp;Numerous news stories and documents address Circular 230, which contains the rules governing the practice of taxpayers’ representatives before the IRS. The IRS Office of Professional Responsibility investigates allegations of misconduct or negligence against tax practitioners and enforces the standards of practice for those who represent taxpayers before the IRS.

Practice and procedure

Sales and use tax is one of the broadest <a href="/products/news-analysis/state-local" target="_blank">state and local tax issues</a> covered by Tax Analysts. Coverage of constitutional sales and use tax issues includes news stories on <a href="http://www.taxnotes.com/state-tax-today/online-sales-taxation/marketplace-fairness-act-dead-year-chaffetz-promises-new-bill/2014/12/11/4622956" target="_blank">federal attempts to change the physical presence nexus standard</a> established in Quill Corp. v. North Dakota; court opinions on state efforts to meet the physical presence requirement through sales and use tax reporting statutes (<a href="http://www.taxnotes.com/court-opinions-us-supreme-court/litigation-and-appeals/supreme-court-holds-tia-does-not-bar-suit-colorados-use-tax-law/2015/03/07/9689256" target="_blank">Direct Marketing Assoc. v. Brohl</a>, No. 13-1032 (2015)); and <a href="http://www.taxnotes.com/state-tax-notes/litigation-and-appeals/will-state-tax-matters-be-shut-out-federal-courts/2014/12/01/4616361" target="_blank">analysis of constitutional sales tax issues</a> including taxpayers’ continued access to federal courts.

Among the technical aspects of sales tax collection that Tax Analysts covers are issues related to <a href="http://www.taxnotes.com/state-tax-notes/electronic-commerce-taxation/cloud-computing-practically-speaking/2015/01/26/9345381" target="_blank">cloud computing</a>; sales taxation of <a href="http://www.taxnotes.com/state-tax-notes/electronic-commerce-taxation/transaction-taxes-information-technologies-threat/2014/12/22/4629311" target="_blank">information technology generally</a>; <a href="http://www.taxnotes.com/state-tax-notes/sales-and-use-taxation/whats-wrong-taxing-business-services/2013/04/22/472611" target="_blank">exemptions for business inputs</a>; <a href="http://www.taxnotes.com/state-tax-today/sales-and-use-taxation/ohio-tax-department-releases-guidance-report-quick-service-restaurants/2014/10/31/4598486" target="_blank">exemptions for purchases such as groceries and sales at restaurants</a>; and narrow issues such as the <a href="http://www.taxnotes.com/state-tax-notes/sales-and-use-taxation/new-york-changes-sales-tax-treatment-scaffolding-services/2014/10/27/4596116" target="_blank">sales taxation of scaffolding services in New York</a>; or <a href="http://www.taxnotes.com/state-tax-today/sales-and-use-taxation/minnesota-dor-updates-guidance-taxation-school-fundraising-sales/2015/03/04/9659756" target="_blank">school fundraising sales in Minnesota</a>.

Finally, Tax Analysts covers <a href="http://www.taxnotes.com/state-tax-notes/sales-and-use-taxation/cloudy-skies-forecast/2015/03/02/9614936" target="_blank">political efforts to reform the sales tax</a> as the economy becomes less reliant on sales of tangible personal property more of a service-based economy. <a href="http://www.taxnotes.com/state-tax-notes/tax-policy/texas-size-tax-cut-texass-future/2014/12/22/4629291" target="_blank">States have also tried recently to reform their tax systems</a> so that they are more reliant on the sales tax and less reliant on property and income taxes. <a href="http://www.taxnotes.com/state-tax-today/sales-and-use-taxation/texas-eyes-sales-tax-holiday-firearm-purchases/2014/12/16/4625636" target="_blank">Sales tax holidays</a> and related tax policy issues are also covered.

Sales and use taxation

Tax Analysts contains news, analysis, and commentary on tax policy. The subject tops the list of reasons why our company exists. In fact, we have some of the leading tax experts on board to keep watch on the government leaders who make tax policy.

You might say that Tax Analysts coverage of tax policy issues begins with the president’s annual budget proposal and, more specifically, the green book, which is a compilation of Treasury’s general explanations of the administration’s fiscal year revenue proposals – both foreign and domestic. (“<a href="http://www.taxnotes.com/worldwide-tax-daily/corporate-taxation/us-budget-proposes-minimum-tax-transition-tax-foreign-earnings/2015/02/03/9513231" target="_blank">Budget Proposes Minimum Tax, Transition Tax on Foreign Earnings</a>” and “<a href="http://www.taxnotes.com/tax-notes-today/budgets/obama-budget-calls-eitc-and-child-credit-expansions-tax-administration-improvements/2014/03/05/63551" target="_blank">Obama Budget Calls for EITC and Child Credit Expansions, Tax Administration Improvements</a>.”) But the breadth of Tax Analysts’ coverage is far wider. Just about everything we do is somehow related to tax policy, whether its coverage of policymakers debating the nature of the tax structure they plan to implement; Congress making and changing the tax laws (“<a href="http://www.taxnotes.com/tax-notes/excise-taxes/economic-analysis-bridging-infrastructure-spending-gap/2015/03/02/9614661" target="_blank">Economic Analysis: Bridging the Infrastructure Spending Gap</a>,” by Martin A. Sullivan, see also our Legislative Outlook column by Luca Gattoni-Celli, “<a href="http://www.taxnotes.com/tax-notes-today/legislation-and-lawmaking/legislative-outlook-tax-reform-aca-more-agenda/2015/02/23/9523371" target="_blank">Tax Reform, ACA, More on the Agenda</a>”); the judiciary opining about what’s already in place; or tax experts offering their opinions on how to make a better tax system (“<a href="http://www.taxnotes.com/tax-notes/corporate-taxation/eliminate-corporate-income-tax-and-level-playing-field/2013/12/02/1223501" target="_blank">Eliminate the Corporate Income Tax and Level the Playing Field</a>,” by Martin Lobel).

We’ve got the tax expertise, and reporters on the ground to bring into focus what matters most in the world of tax policy.

Tax policy

The Washington Department of Revenue issued guidance on the taxation of transactions that involve non-fungible tokens (NFTs), stating that the strength of the digital code in such a transaction, the underlying components, and the identity of the parties to the transaction will be assessed when determining the proper tax treatment; NFT sellers must keep documentation indicating the time and place of the sale and all records necessary to establish the taxability of the transaction.