- The Supreme Court of British Columbia ruled that certain Amazon Web Services (AWS) technical support and cloud products are not subject to British Columbia’s 7% provincial sales tax.
- The British Columbia’s Minister of Finance had previously determined that the services were subject to the tax as a software program and assessed the company for sales tax not collected.
- The court ruled that for a product to be classified as a “software program”, a computer user must be required to operate the software as an application, and the user must be able to interact with the software and create outputs based on those interactions.
- The AWS cloud products used by the taxpayer were defined by the court as professional services, which are non-taxable in British Columbia.
- The purchase made by the taxpayer was mostly for technical personnel, a professional service, and the support services were not offered separately.
- The AWS direct connect service was not operated in British Columbia and therefore not taxable.
- Taxpayers should be aware of these definitions when purchasing similar products and services and consider the location where the services are operated to determine the correct taxability in British Columbia.
Source: salestaxinstitute.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
