BizSugar.com › Legal › SaaS, Cloud Services Subject to Sales Tax, New York Says / Burgoyne Law Group

The law regarding sales tax, SaaS and cloud services is all over the map. Colorado levies sales tax on software only to the extent delivered on a tangible medium. Texas generally taxes SaaS and other cloud services, but as a “data processing service” and not as a sale. South Carolina regards SaaS as “communications,” a subset of personal property subject to sales taxation. And Wisconsin looks to the location of and control over the services provider’s server; if that server is not in Wisconsin and is not controlled by a Wisconsin end user, the end user’s fees are not subject to sales tax. For a good summary of SaaS and sales tax, see Taxation of the Cloud Still Hazy, an article from the AICPA’s Tax Adviser magazine.