States Consider Tax Exclusions for Bundled Digital Products

A multistate initiative studying the tax treatment of bundled digital products suggested states provide clear definitions and protocols for the application of exclusions to avoid potential administrative challenges for sellers and revenue departments.

The Multistate Tax Commission’s digital products work group on Thursday reviewed a new set of recommendations for states that currently tax or plan to tax digital goods and services. The recommendations were added to a report by an ad hoc study group that focused on bundling—the blending of distinct products and services for sale at a single combined price.

Bundling is a tricky issue in the digital ...