State Tax Chart Results Tax Type: Sales/Use Legend: N/A - Not Applicable Software as a Service (SaaS) This chart shows whether or not the state imposes a tax on the sales of Software as a Service (SaaS). For purposes of this chart, SaaS is a cloud computing model in which general or specialized software applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet. The customer generally does not manage or control the software or the underlying cloud infrastructure. State Software as a Service (SaaS) Comments Authority Editorial Reference AK N/A N/A N/A N/A AL No guidance issued N/A N/A AR No guidance issued However, sales or leases of services are exempt unless specifically designated by law as taxable and Software as a Service is not specified in the statute as taxable. In addition, the sale or licensing of computer software that is downloaded through a modem or by other electronic means is not subject to tax provided that the licensing charges are stated separately from the charges for manuals, disks, CDs or other tangible property. N/A AZ Taxable N/A Arizona Taxpayer Information Ruling No. LR11-011,, 06/22/2011; Arizona Taxpayer Information Ruling No. LR11-010,, 06/22/2011; Arizona Taxpayer Information 12,045
CA Not taxable The sale or lease of a prewritten program is not taxable if the program is transferred by remote telecommunications from the seller's place of business, to or through the purchaser's computer, and the purchaser does not obtain possession of tangible personal property in the transaction. Ruling No. LR10-007,, 03/24/2010; Arizona Private Taxpayer Ruling No. LR04-010,, 11/15/2004 Cal. Code Regs. 18 1502(f)(1)(D) CO Not Taxable A company that provided web-based solutions for sending, receiving, and tracking large digital files via the Internet whose customers purchase monthly or annual subscriptions priced according to the features included in the package, was found to be providing a service and therefore, not subject to tax. CT No guidance issued Although Connecticut has not issued specific guidance on the taxation of cloud computing or SaaS, the state would likely view such transactions as a computer or data processing service Colorado Private Letter Ruling No. PLR-11-007,, 12/20/2011; Colorado General Information Letter No. GIL-12-006,, 04/04/2012 Conn. Gen. Stat. 12-407(a)(37)(A) ; Conn. Agencies Regs. 12-426-27(b)(1) ; Connecticut Legal Ruling No. 93-1,, 04/06/1993 DC Taxable Tax applies to data processing services, which include the maintenance, input, and retrieval of information; the provision of direct access to computer equipment to process, D.C. Code Ann. 47-2001(n)(1)(N) ; D.C. Mun. Regs. 9 474.1 ; D.C. Mun. Regs. 9 474.4
examine, or acquire information stored in or accessible to the computer equipment; and computerized data and information storage and manipulation. Gross receipts from the sale, lease or rental, or maintenance of any computer software are subject to the tax regardless of whether the software is canned, prepackaged or customized. Taxable software services include application software. DE N/A N/A N/A N/A FL No guidance issued However, monthly fees allowing customers access to pre-written software do not constitute taxable transactions, provided the software is accessed electronically. Florida Technical Assistance Advisement No. 05A-026,, 06/02/2005 GA No N/A Letter Ruling SUT No. 2014-02-20-01, 2/20/14, released June 2014. HI No guidance issued Not specifically exempted; likely taxable Haw. Rev. Stat. 237-13 IA Not taxable N/A State Taxability Matrix version 2015.0, eff. 08/01/2015 ID Not Taxable There is an exclusion from the definition of taxable tangible personal property for computer software that is delivered electronically, remotely accessed computer software, and computer software that is delivered by the load and leave method Idaho Code 63-3616(b)
where the vendor or its agent loads the software at the user's location but does not transfer any tangible personal property containing the software to the user. IL Not taxable Not considered a transfer of tangible personal property. IN Taxable Prewritten computer software maintained on computer servers outside of Indiana is subject to tax when accessed electronically via the Internet KS Not Taxable Hosted software is not taxable because it is not an enumerated taxable service, it is not considered a lease since the customer does not have control over or have possessory rights to the software, and it is not considered prewritten computer software because it is not delivered to subscribers or installed on their computers unless the software is billed to the subscriber as a separate line item charge KY Not taxable Although no guidance, likely not taxable, since the state has proposed legislation to clarify that this method of delivery of prewritten software is taxable. Ill. Admin. Code 86 130.2105(a)(3) ; Illinois Dept. of Rev. General Information Letter No. ST 10-0062-GIL,, 08/04/2010 Indiana Information Bulletin No. ST8,, 11/01/2011 Kansas Opinion Letter No. O-2012-001,, 02/06/2012 Kentucky Competes: A Modern Tax Code that Creates Jobs, 02/04/2014 LA No guidance issued N/A N/A
MA Taxable N/A Mass. Regs. Code 830 CMR 64H.1.3(3)(a) ; Massachusetts Letter Ruling No. 12-8,, 11/08/2013 MD No guidance issued Maryland does not specifically provide for the taxability of cloud computing. Generally, Maryland imposes sales and use tax on retail sales and use of tangible personal property in the state. The person required to pay the sales and use tax has the burden of proving that a sale in the state is not subject to the sales and use tax. Therefore, unless otherwise provided, cloud computing is taxable. Md. Code Ann. Tax-Gen. 11-102(a) ; Md. Code Ann. Tax-Gen. 11-103(b) ME No Guidance Issued N/A N/A MI Taxable A Michigan Department of Treasury release states a computer program transferred or downloaded electronically by a network, intranet, the Internet, or by any other electronic method is taxable if the software being transferred meets the definition of canned software. However, a Michigan trial court has held that cloud computing services are not subject to the state's use tax (Auto-Owners Insurance Company v. Department of Treasury, Mich. Ct. Claims, Dkt. No. 12-000082-MT, 03/20/2014.) Also, in an unpublished Michigan Revenue Administrative Bulletin No. 1999-5,, 09/28/1999
decision, the Michigan Court of Appeals held that the sale of a taxpayer's online tax and accounting research program, which provides subscribers access to a wide collection of information, was not subject to use tax because any transfer of tangible personal property was incidental to the service provided (Thomson Reuters Inc. v. Department of Treasury, Mich. Ct. App., Dkt. No. 313825, 05/13/2014 (unpublished)). A Michigan trial court has also held that a taxpayer was not subject to use tax on its use of an online information database (Rehmann Robson & Co., P.C. v. Department of Treasury, Mich. Ct. Claims, Dkt. No. 12-000098-MT, 11/26/2014.) MN No guidance issued However, Minnesota law provides that the transfer of prewritten computer software for consideration, whether delivered electronically, by load and leave, or otherwise, is a taxable sale or purchase. Minn. Stat. 297A.61, Subd. 3(f) ; Minn. R. 8130.9910, Subp. 2(A) ; Minnesota Sales Tax Fact Sheet No. 134,, 06/01/2015 MO Exempt N/A Mo. Code Regs. 12 10-109.050(3)(I) MS Taxable No specific guidance, but gross income from computer software or program sales and services are taxed at the regular retail tax rate unless otherwise exempt Miss. Administrative Code 35.IV.5.06
MT N/A N/A N/A N/A NC No guidance issued N/A N/A ND Not taxable N/A Taxability Matrix, 07/28/2014. NE Not taxable N/A Nebraska Information Guide No. 6-511-2011,, 07/27/2011 NH N/A N/A N/A N/A NJ Not Taxable N/A LR: 2012-4-SUT, 06/22/2012; New Jersey Division of Taxation Technical Bulletin No. TB-72,, 07/03/2013 NM Taxable The provision of cloud computing is a taxable license of an intangible. However, receipts from providing storage capacity for data on a server located outside New Mexico are not subject to gross receipts tax in New Mexico. NV Not taxable Nevada has not issued specific guidance on the taxation of cloud computing or SaaS. However, since the Nevada sales and use tax only applies to tangible personal property and does not apply to charges for services if tangible personal property is an inconsequential element of the sale, software as a service would not be subject to tax. NY Taxable New York Sales Tax Bulletin No. TB-ST-128,, 08/05/2014 OH No guidance issued Ohio imposes a tax on the provision of New Mexico Taxation and Revenue Dept. Ruling No. 401-13-2,, 06/26/2013; New Mexico Taxation and Revenue Dept. Ruling No. 401-13-3,, 07/19/2013; New Mexico Taxation and Revenue Dept. Ruling No. 401-12-2,, 09/28/2012 Nev. Rev. Stat. 372.105 ; Nev. Rev. Stat. 372.185 ; Nev. Rev. Stat. 374.110 N/A Ohio Rev. Code Ann. 5739.01(B)(3)(e) ;
electronic information services (including internet access) for consideration for use in business by a consumer. However, Ohio has not issued guidance on whether or not the sales of SaaS would constitute a taxable electronic information service. OK Not Taxable Not among the services subject to tax in Oklahoma, which explicitly exempts electronic sales of prewritten software Ohio Admin. Code 5703-9-46(B)(1) ; Ohio Admin. Code 5703-9-46(B)(2) Okla. Stat. 68 1357(32) ; Okla. Admin. Code 710:65-19-156(b) OR N/A N/A N/A N/A PA Taxable "Cloud computing" is subject to Pennsylvania sales and use tax when the user is located in Pennsylvania Pennsylvania Sales and Use Tax Ruling No. SUT-12-001,, 05/31/2012 RI Taxable Cloud services that use software that is licensed and sold by the cloud service provider are taxable. In addition, charges for the software are also subject to tax. However, when an agreement exists for a vendor to host software from their equipment and may be accessed by a customer, the transaction is not considered prewritten computer software delivered electronically and therefore is not subject to tax, provided there is no downloading of prewritten computer software R.I. Reg. SU 11-25 SC Taxable Charges by an Application Service South Carolina Revenue Ruling No.
Provider ASP that allows a customer to access the ASP website and use the software on that website are taxable as communications services; other software sold and delivered by electronic means is not taxable. 12-1,, 03/20/2012; South Carolina Revenue Ruling No. 05-13,, 08/21/2005 SD Taxable While no mention is made of cloud computing, fees for access to software, databases or networks are taxable S.D. Admin. R. 64:06:02:78 TN Taxable as of July 1, 2015 Effective July 1, 2015, access of an out-of-state software application via the Internet is taxable. Prior to July 1, 2015, no sale or use of tangible personal property occurs in Tennessee when the taxpayer accesses an out-of-state software application via the Internet, because the vendor did not transfer title, possession, or control of the software application to the taxpayer Tenn. Code Ann. 67-6-231(a)(2) ; Tennessee Important Notice No. 15-14,, 06/01/2015; Tennessee Letter Ruling No. 11-58,, 10/10/2011; TX Taxable N/A Texas Policy Letter Ruling No. 201207533L,, 07/31/2012 UT Taxable License fees for remotely accessed prewritten software are taxable if the purchased software is used in the state Utah Informational Publication No. 64,, 05/01/2012 VA Not Taxable N/A Virginia Public Document Ruling No. 12-191,, 11/29/2012; Virginia Public Document Ruling No. 12-215,, 12/21/2012 VT Taxable The legislative The Sales and Use
moratorium on collection of sales tax on remotely accessed prewritten software expires on June 30, 2013 and tax will be collected on such sales beginning July 1, 2013. WA Taxable Remote access software (prewritten software which resides on the seller's server, or on a third party's server, with the buyer paying for access to the software) is subject to tax. Tax Treatment of Cloud Computing, 06/07/2013 Wash. Rev. Code 82.04.050(6)(b) ; Washington State Department of Revenue, Digital Products Bills (ESHB 2075 & SHB 2620), 05/03/2010 WI Not taxable Charges for accessing prewritten computer software located on the vendor's server, if the customer does not have access to or control over the vendor's server, are not taxable. WV Taxable Consumer sales and service tax applies to the furnishing of all services, unless specifically exempt. There is no statutory exemption for SaaS. FAQs - Sales and Use Tax Treatment Computer Hardware, Software, Services; Wisconsin Private Letter Ruling No. W1025002,, 03/24/2010; Wisconsin Private Letter Ruling No. W0921002,, 03/06/2009 W. Va. Code 11-15-8 ; W. Va. Code 11-15A-2 ; Code of State Rules 110-15-33.1 WY Not taxable N/A No. 08/01/2014(Computer Sales and Services),, 08/01/2014 Last run 9/23/2015 2015 Thomson Reuters/Tax & Accounting. All Rights Reserved.