Pennsylvania Tax Treatment of Digital Assets

Joseph C. Bright, a member of the Tax practice at Cozen O'Connor, will be speaking at this event, “Pennsylvania Tax Treatment of Digital Assets CLE - PA Tax Treatment of Digital Assets.”

Digital revolution descended upon us and states now must explore the taxation of digital assets. Although not clearly defined in Pennsylvania, digital assets generally may include digitally stored content, online accounts, and files stored on digital devices, such as computers, tablets, and smartphones. In addition, accounts managed and maintained on the internet or cloud storage, social networking sites, and music accounts.

This CLE presentation will examine questions that arise in Pennsylvania in the treatment of digital items for tax purposes. Our panelists will identify some of the following tax issues that may surface in the consideration of assets from a digital environment:

- What is a digital item/asset?
- Software (canned or custom)
- Tangible personal property versus service
- For net income tax purposes, how are sales or gross receipts treated in an apportionment formula, before and after the market sourcing legislation?
- How are costs and performance measured?
- Where are services situated (i.e., where did the taxable transaction occur)?
- For Sales Tax purposes, when does a sale or use occur in Pennsylvania?
- How are remote services, sometimes referred to as "cloud-related" services, treated?