Jurisdictions face an on-going balancing act - tax and receive revenue today or defer and hope for growth and more revenue tomorrow.
In December, Vermont lawmakers, tax officials, and representatives of the business and software communities voted 4-3 on Monday to exempt businesses from a tax on cloud computing services in a set of recommendations to the Legislature.
The members of the Sales and Use Tax Study Committee who are in favor of a tax on remotely accessed software argued that the state would lose $2 million in potential tax revenue in the first year, and untold millions more in future years, as businesses expanded and scrambled to exploit a tax exemption.
Those against the tax on cloud computing said the economic benefits of an exemption would outweigh lost tax revenue, by keeping businesses, jobs, and especially software companies in the state.
So, Vermont Cloud Providers, enjoy the new tax break. For our clients using SureTax® Telecom for their cloud tax calculations - no worries. The change in Vermont will be implemented automatically once passed by the Legislature.