Lawmakers contemplate ‘cloud computing’ tax
By THATCHER MOATS
VERMONT PRESS BUREAU | April 05,2012
MONTPELIER – In an effort to address an uprising in Vermont’s business sector against a tax on “cloud computing,” the House Ways and Means Committee approved a bill Thursday that would take the extraordinary step of refunding $1.9 million in sales tax revenue.
But the legislation still falls short of what business owners and the Shumlin administration wanted because it does not create a sales tax exemption for software services or products accessed through the what’s become known as “the cloud.”
According to the bill, cloud computing is defined as the use of “pre-written software run in underlying infrastructure that is not managed or controlled by the consumer or a related company.”
Essentially, instead of a business having computer infrastructure and software on-site, they can contract with another company that has the equipment and software and use those services over the Internet.
Rep. Adam Greshin, an independent from Warren, sits on the House Ways and Means Committee and is a co-owner of Sugarbush Resort.
Sugarbush, for instance, uses a Stowe-based company called Inntopia to handle bookings over the Internet for Sugarbush’s hotel rooms.
The question that has arisen this year in the Statehouse is whether Sugarbush and other companies should pay sales taxes when they access companies like Inntopia’s “pre-written” software over the Internet.
Vermont already taxes the sale of pre-written software when its purchased at a store or downloaded from the Internet. And the tax department contends that cloud computing is also taxable.
But some businesses and advocates say the tax department is improperly interpreting the law and shouldn’t be taxing cloud computing services.
To read the full story, see Friday's Rutland Herald.