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Date: May 30, 2016
State Tax Notes

An article authored by Eric Yauch, “Tax Board Rules on Designation of Video Game Hardware and Software” published in State Tax Notes, a Tax Analysts publication, quoted Garvey Schubert Barer attorney Michelle DeLappe on the subject of a recent Board of Tax Appeals decision.

The decision, GameStop Inc. v. Department of Revenue, ruled against a sales tax assessment that improperly applied the trade-in exclusion statute. DeLappe agreed with the board’s ruling as an apt interpretation of the tax exclusion for trade-in property of like kind: “gaming hardware and software obviously cannot be used separately from each other, so the department’s claim that trade-ins of one for the other do not qualify for the exception to sales tax is strained.” She added that, “although tax exemptions must be strictly construed, that certainly does not mean taxpayers should always lose disputes involving exemption.” Though a petition for reconsideration or petition the superior court for review is possible, DeLappe doubts that a judge would find any reversible error in the board’s ruling.

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