Mississippi Amends Tax Treatment of Cloud Computing

The Mississippi Department of Revenue has proposed amendments to their regulations for the tax treatment of computer equipment, software, and certain related services. New definitions are proposed for computer software, cloud computing, Software as a Service, Platform as a Service and Infrastructure as a Service.  The amendments would expand sales and use tax to “services delivered via Software as a Service, Platform as a Service, Infrastructure as a Service, and other cloud computing models.” The amendments would also update the definition of “Software as a Service” as a “software hosted and maintained by a third-party provider and delivered to customers over the internet as a service.” Lastly, the amendments would delete a sentence regarding the taxability of software being kept on a server outside the state, making it taxable unless first use of the software occurs outside Mississippi which will be exempt. No public hearing was scheduled and therefore, the proposed changes will be effective October 24, 2021. (Mississippi Department of Revenue, effective October 24, 2021)

Posted on October 28, 2021