- Indiana Department of Revenue ruled that subscriptions for generative AI chatbots are nontaxable services.
- The AI services are accessed electronically without permanent ownership, making them exempt from sales tax.
- Customers access the chatbot via web or open-sourced API without owning the chatbot.
- No software or programming code is delivered to customers.
- Two chatbot API plans are offered, with functionalities ending if payment stops.
- The services do not qualify as taxable prewritten software or digital products under Indiana law.
Source: deloitte.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.
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