TechNet supports tax policies that promote innovation and foster an economic climate that enables companies to compete, thrive, invest, and expand in the United States and around the globe.
TechNet’s state program supports the following principles:
- Research and development tax credits that spur growth in key technology sectors.
- Expanding access to existing tax credits for gig and sharing economy participants.
- Lower corporate tax burdens and/or prevent attempts to raise corporate and payroll taxes in order to fund additional government services.
- Preventing attempts by states to tax pre-written computer software and cloud computing services or software as a service (SaaS).
- Engagement on nexus tax legislation that negatively impact member companies and small businesses that are seeking to comply post-South Dakota v. Wayfair, including but not limited to marketplace facilitator nexus, economic nexus, payment facilitator nexus, and remote seller representative nexus.
- Support policies that promote startup businesses by not increasing taxes on entrepreneurial investment activities.
- Promoting and expanding investment tax credits and angel investor tax credits.
- Tax policy that provides clean energy technologies with a stable tax environment that appropriately supports the industry’s unique financing needs.
- Find an amenable and consistent way for states to tax or apply fees to the evolution of work (i.e., gig economy), which is rapidly growing and forcing policymakers to grapple with how to tax or apply fees to disruptive technologies that do not rely on brick and mortar presences in a state and are competing with traditional industries that already may be regulated and taxed.
Exempting Cloud/SaaS Taxes
Many states consider cloud or Software as a Service (SaaS) purchases as an untapped source of revenue as hardware offerings become less prevalent. The question centers on whether offering storage space in the cloud is a tangible “good” (subject to sales taxes), a “service” (subject to use taxes), or neither of those. Different states are making different decisions and the situation is still evolving. TechNet will continue to oppose state-by-state efforts to extend traditional sales taxes to SaaS and related technology services.
As states seek to implement new guidelines or legislation on the collection of sales taxes from remote sellers following the 2018 Supreme Court ruling in South Dakota v. Wayfair, the state program will advocate for a reasonable small business exemption, simplification of tax collection and remittance, limits on audit liability and reporting requirements, and reasonable effective dates to allow for compliance.
Investment Tax Credits
Legislation related to tax credits, such as research and development, employment credits for job creation, angel investor, venture capital, and technology investment/development tax credits, can spur growth, incentivize economic activity, and help companies make decisions regarding where to expand their operations. The current landscape for state-level tax credits is in flux. Traditional credits are embraced in some states but discontinued or in jeopardy in others. Increasingly, new tax credit proposals focus on the startup sector to ensure increased access to venture capital and angel investor dollars needed to succeed in a competitive market. TechNet will continue to educate policymakers about the benefits of smart investment tax credits, work to protect and/or restore traditional, existing credits, and promote consideration of new kinds of credits aimed at expanding the benefits into the innovation economy.
Clean and Renewable Tax Incentives
Many companies have a vested interest in “going green,” and consumers expect technology companies to be leaders in this endeavor. Furthermore, because of the global scope and nature of technology companies’ offerings, it is critical that they have a source of affordable, predictable, and reliable energy that will not be interrupted due to the myriad of political circumstances outside a company’s control. Lower energy costs allow for tech companies to use those savings on other areas of their businesses. TechNet will promote the continuation and adoption of these incentives.