Vermont Discusses Sales & Use Tax on Cloud Software
This past month, Vermont issued a fact sheet describing sales and use tax implications related to cloud software. Through legislation effective July 1, 2015, charges for the right to access remotely prewritten software shall not be considered charges for tangible personal property.
Vermont generally imposes sales tax on retail sales of tangible personal property including prewritten computer software unless an exemption applies. However, under new legislation, software accessed solely on a cloud platform does not fall within this definition and therefore is not subject to Vermont sales and use tax. This transaction will be treated as a computer services or intangible transaction for Vermont sales and use tax purposes. These services/transactions are generally not subject to sales tax unless specifically stated.
However, prewritten software that comes in other forms, included downloaded, is still considered taxable tangible personal property subject to Vermont sales and use tax. For a copy of the fact sheet, click here.