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Information retrieval systems allow vendors to store data electronically and charge customers a fee to access and retrieve the information. In this article, Reed Smith LLP's Lee A. Zoeller, Robert E. Weyman, Christine M. Hanhausen, and Michael I. Lurie discuss a recent Pennsylvania Department of Revenue letter ruling that applies sales tax to these systems. 

Authors: Christine M. Hanhausen Michael I. Lurie Robert E. Weyman Lee A. Zoeller

Type: Articles Published

Lee Zoeller is chair of Reed Smith's State Tax Group of more than 30 lawyers which is nationally renowned for helping corporations save significant state taxes. Robert Weyman is counsel in the State Tax Group. Rob assists clients with income, sales, and gross receipts tax issues around the country. Christine Hanhausen is part of the State Tax Group in Philadelphia. Christine focuses her practice n Pennsylvania and New Jersey Income Tax and Sales and Use Tax issues. Michael Lurie has been a member of Reed Smith's State Tax Group since 2013. Michael currently focuses his practice on Pennsylvania, Virginia, and New Jersey taxes, and unclaimed property. 

Twenty years ago, the Pennsylvania Legislature repealed Pennsylvania's sales tax on information retrieval services. The tax on information retrieval services was never reenacted, but a new letter ruling (Letter Ruling SUT-17-002) from the Pennsylvania Department of Revenue (“Department”) nevertheless argues that these services are taxable once again. The Department's ruling echoes the arguments made by the Michigan Department of Treasury several years ago when Michigan unsuccessfully attempted to impose sales tax on information retrieval services.

This article provides an overview of the Department's guidance prior to issuing SUT-17-002, an analysis of the letter ruling, a brief history of Pennsylvania's tax on information retrieval services, and suggested next steps for taxpayers in light of the Department's position in the letter ruling.

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