VATLive > Blog > Americas News > US Texas applies sales tax online gaming

US Texas applies sales tax online gaming

  • Oct 28, 2019 | Richard Asquith

Earlier this year, the Texas Comptroller of Public Accounts issued a decision to make income from the sales to Texan consumers of online games liable to sales tax. This was based on a remote provider of the gaming, in Virginia in this decision. 

In this case, the Virginian gaming company had an employee in Texas. Under the ‘physical nexus’ test, this creates a sale tax presence in Texas. The Comptroller also determined online gaming fell under the existing ‘amusement services’, including ‘games of skill’. Whilst the provider argued that they were a non-liable out-of-state provider, the Comptroller differed stating sales tax is due at the location where delivered. 

The ruling follows the EU and global rules on VAT and GST. It reflects the movement in the US to impose sales tax on digital goods (termed digital services in Europe and elsewhere). It also reinforces the Supreme Court Wayfair 2018 ruling that sellers from outside of the side are also potentially liable to charge and remit sales tax.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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