The Complexities of Taxing the Cloud
June 13, 2014
Grazed from Government Technology. Author: Penelope Lemov.
Some 50 years ago, states and localities missed the boat on keeping their sales taxes current. As the economy shifted from manufacturing to services, most governments failed to slap sales taxes on them. Now there’s a new wrinkle confronting states and localities: The migration of commerce — the sale of goods and services — to the cloud.
The shift poses a number of challenges for tax departments. Namely, if software is provided virtually and hosted by a worldwide network, has real property changed hands and can states tax it? With software sales on the cloud expected to generate $17 billion in revenue worldwide this year, states and localities are in a hurry to sort out these kinds of questions…
At a recent conference, Harley Duncan, managing director for state and local tax at KPMG and the former executive director of the Federation of Tax Administrators, laid out the issue for governments. His comments were edited for clarity and length…
Read more from the source @ http://www.govtech.com/budget-finance/Complexities-of-Taxing-the-Cloud.html