The Illinois Department of Revenue has issued a general information letter stating that it intends to propose regulations concerning online software transactions including application service providers, software hosting, and Web-based software.
New Jersey Discusses Taxability of Cloud Computing
New Jersey has issued a bulletin addressing the application of sales and use tax to the sale of cloud computing. Cloud computing falls under one of three categories: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure…
Michigan Characterizes Cloud Computing as Nontaxable Service
Michigan has held that a taxpayer\’s purchases of cloud computing services are not subject to use tax.
Database Subscriptions Not Taxable in Massachusetts
Subscriptions to a taxpayer\’s electronic database are not subject to Massachusetts sales and use tax because the taxpayer is selling database services and not the use of software.
New Federal Digital Goods and Services Bill Proposed
Representative Lamar Smith (Republican, Texas) has introduced a bill to bar multiple taxes on digital goods and services. Smith had proposed an earlier bill which failed to pass. This bill is a revised version of the earlier bill. The proposed…
Massachusetts Revises Cloud Computing Ruling
Massachusetts has revised a letter ruling addressing the sales and use tax treatment of cloud computing products.
Chicago Provides Guidance on Personal Property Lease Transaction Tax
Chicago has issued a revised ruling providing guidance on the Chicago personal property lease transaction tax related to computer use and software.
Maine Sales Tax Applies to Products Transferred Electronically
Maine’s budget bill has been enacted, creating provisions for taxing products transferred electronically. Effective June 26, 2013, Maine sales tax applies to “products transferred electronically.” A “product transferred electronically” is a digital product transferred to a purchaser electronically, the sale…
Washington Repeals Exemption for Certain Phone Services
In response to changes in technology and deregulation, to make its laws more current with telecommunication offerings, and due to a 2011 court decision regarding the interpretation of residential telephone service, Washington’s sales tax exemptions for residential telephone service and…
Massachusetts Enacts Tax on Computer Services – Repealed Retroactively
The Massachusetts Senate and House of Representatives have voted to override a veto from Governor Deval Patrick and enact legislation that imposes sales and use tax on computer system design services and the modification, integration, enhancement, installation, or configuration of standardized software.
Texas Enacts Data Center Exemption for Certain Property
Texas has enacted a temporary sales and use tax exemption for certain tangible personal property used in data centers that meet certain capital investment and new employment requirements. A qualifying data center is one that is a single qualifying applicant…
Vermont Moratorium for Tax on Cloud Computing Expires
Vermont has issued a fact sheet discussing cloud computing and advising taxpayers that the legislative moratorium on the Vermont Department of Taxation’s collection of sales tax on prewritten software accessed remotely has not been extended and expires on June 30,…
Sale of Virtual Computer Offerings Taxable in Massachusetts
Sales of virtual computing offerings, including remote access, remote support, and online conferencing, are subject to Massachusetts sales and use tax when sold to customers located in Massachusetts. The sales are subject to tax because the true object of the…
Email Service Fees Not Taxable in Indiana
Charges paid for the use of a mass emailing service were not subject to Indiana sales and use tax because there was no transfer of tangible personal property or specified digital products from the provider to the purchaser of the services.
Mississippi Adopts Rule on Digital Products
Mississippi has adopted a rule on the sales and use tax treatment of specified digital products. “Specified digital products” are electronically transferred digital audiovisual works, digital audio works, and digital books. A sale, rental, or lease of a specified digital…
Vermont Enacts Temporary Exemption of Remotely Accessed Software
Vermont has enacted legislation that temporarily prohibits the Vermont Department of Taxes from assessing sales and use tax on charges for remotely accessed software made after December 31, 2006 and before July 1, 2013. Taxes on such charges shall be…
Charges for Software as a Service Not Taxable in New Jersey
A company’s charges for software as a service (SaaS) are not subject to New Jersey sales and use tax as long as the software is only accessed by the user and there is no transfer or delivery of the software…
Application Software Accessed via Internet or Cloud Not Taxable in Idaho
Application software accessed over the Internet or through wireless media is not subject to Idaho sales and use tax because it is excluded from the definition of tangible personal property. “Application software accessed over the Internet or through wireless media”…
Sales of License to use Online Database Taxable in New Mexico
An out-of-state company that sells licenses to use its online database to New Mexico customers is subject to gross receipts tax on the sales. License to use qualifies as taxable intangible property. In this case, New Mexico customers buy licenses…
D.C. Amends Online Hotel Sales Tax Provisions
The District of Columbia has enacted the Fiscal Year 2013 Budget Support Act of 2012, which amends online hotel sales tax provisions.
Drawings Delivered Electronically Not Taxable in New York
A taxpayer\’s sales of drawings delivered electronically as PDF files are not subject to New York sales and use tax.
Tax is Based on Amount Paid to Hotel, Not Amount Charged by Online Travel Companies in California
A California court has found that transient occupancy tax is based on the room rental received by the hotel, not on the amount paid to an online travel company (OTC) by the customer. Santa Monica attempted to enforce its transient…
In-State Remote Access Software Taxable in Pennsylvania
Charges for the use of canned computer software hosted on a server and accessed electronically by a taxpayer’s customers and employees are subject to Pennsylvania sales and use tax if the end user is located in-state. Computer software is tangible…
Medical Practice Management Services Not Taxable in Massachusetts
A company\’s sales of web-based services to physicians to help with management of records, billing, and communications are not subject to Massachusetts sales and use tax.