- New York ruled a taxpayer’s cloud-based document management system as taxable software, not nontaxable data storage and security services.
- Sales tax laws lag behind technology, complicating tax guidance for tech products and services.
- Aprio’s SALT team offers guidance on sales tax compliance.
- The company’s services were mainly for law, financial, and accounting firms, including document storage, security, and workflow tools.
- During a sales tax audit, the company claimed its product was nontaxable, but the ALJ ruled it as taxable software.
- The ALJ emphasized the software’s role in service delivery and its core function in the company’s platform.
- Contracts included software-related provisions, and bundled services were taxed as a whole.
- The company argued for revenue apportionment by user location, but historically used billing addresses for tax returns.
Source: aprio.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.
