Idaho Wants to Tax the Cloud—Wall Street Journal

Using Online Software Services Can Help Small Businesses Cut Costs. But Companies in Idaho are Discovering It Can Also Increase Their Tax Bills. 

 Steven D. Jones at the Wall Street Journal reports:

Several Idaho companies have become the subject of audits since a recent decision by the Idaho State Tax Commission that made subscription software delivered online subject to state sales tax. The ruling was a surprise because Idaho doesn’t tax services. Professionals who provide help from accounting to appliance repair are exempt from the state’s 6% sales tax.

Idaho is just the latest state to take action on cloud taxation since late 2009, as states seek to tap into this fast-growing and potentially lucrative area. Arizona, Indiana, New York, Texas and Washington have adopted various approaches to apply sales tax to cloud services.

In contrast, Kansas and Nebraska tax authorities decided cloud services would remain exempt from sales tax as long as buyers didn’t download software. Rhode Island, Tennessee, Virginia and Wisconsin arrived at similar conclusions.

Idaho Has Joined New York, Texas, Arizona, and Other States in Taxing Cloud Services

Read the whole story here. 

see also:
Can the Cloud Help Small Businesses? —Wall Street Journal [1/9/13]
Storage Services Save Money, but Complaints Include Security, Lack of Control