By Blake Larum, Senior Tax Manager
ASL Technology Group

The recent worldwide phenomenon of Pokémon Go raises some interesting questions regarding state taxation. The app itself is free, however there are premium features that cost the user money and thus create revenue for the Company who developed it. Niantic, Inc., who collaborated with Nintendo to develop Pokémon Go, also generates revenue from corporate sponsorships. This is similar to “product placement” in movies and television shows, a form of advertising revenue for the Company. This advertising revenue, along with the direct digital revenue generated from the purchase of premium features within the game, results in roughly $1.5M of revenue per day for Niantic. This article will focus on the digital revenue and its potential state tax impact. (more…)