How Do You Tax Businesses Operating in the Clouds?

Cloud-TaxesCloud computing refers to an IT revolution that many businesses have adopted to reduce technology costs.  The number of businesses using the cloud to provide products and services to a global market is rapidly expanding.  These cloud businesses are struggling with how to manage the tax treatment of cloud-related operations.  Providers and purchasers of cloud services often have a hard time defining exactly what they are selling or buying.  Questions such as: are cloud transactions taxable, is sales tax owed on cloud sales, and which jurisdiction can tax the activity, are frequently asked with few clear answers?  Just recently the states have started to provide guidance on how the tax laws apply to the cloud operations.  However, there remains many unanswered questions.

The Internet has introduced a multi-state tax consequence to many businesses that operate in the clouds.  Businesses that fail to adapt to the new IT World Order will pay a penalty for non-compliance.

The KatzAbosch SALT Group are up-to-date on the application of the tax laws to cloud operations and can help your business comply with the complexities of cloud computing.   The SALT Group at KatzAbosch has specialists that know the latest rules and can help business clients minimize their tax obligations and comply with the tax laws and regulations.

Please contact the KatzAbosch SALT Group if you have any questions regarding Cloud computing tax issues: abareham@katzabosch.com or 410-828-2727.

Prepared by Andy Bareham, CPA, MST, Chair of the KatzAbosch SALT Group

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