Senate Bill 523 Summary

• Sales and Use Tax Modernization: Replaces outdated terminology ("tangible personal property") with "items" throughout tax code; clarifies definitions for digital property, bundled transactions, and remote sales to align with current e-commerce practices.

• Real Property and Mixed Contracts: Establishes clearer rules for taxing real property contracts, repair/maintenance services, and mixed transaction contracts; introduces new "property management contract" definitions effective 2019.

• Digital Products and Services: Expands sales tax application to certain digital property (audio works, audiovisual works, publications, photographs) delivered electronically; effective October 1, 2019.

• Tobacco and Excise Tax Changes: Updates cigarette/tobacco licensing requirements, introduces delivery sales regulations with age verification requirements, and modifies tax treatment of vapor products at 5¢ per fluid milliliter.

• Tax Compliance and Administration: Increases collection assistance fee notice period from 30 to 60 days; adds penalties for informational return failures; clarifies withholding requirements for nonresident and ITIN contractors; provides refund statute of limitations extensions for certain contingent events.