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Vermont now taxes prewritten ‘cloud’ software after session-law repeal, tax expert says
Summary
Committee discussion clarified that a session law repealed last year makes prewritten software accessed remotely subject to Vermont sales tax; custom software and several services remain non-taxable, and sourcing and exemptions raise follow-up questions for the Department of Taxes.
The Ways & Means Committee heard that prewritten software accessed remotely — commonly called "the cloud" — is now subject to Vermont sales tax following a repeal of a prior session law.
Kirby, a committee staff member who led the explanation, said the change followed repeal of an older session law and a clarifying sentence added to the sales-tax definitions. "Before last year in Vermont, sales tax applied to downloaded software from the Internet," Kirby said. "But because of some session law ... prewritten software that's accessed remotely ... was not taxable." Kirby added that repeal of that session law made remote access to prewritten software taxable.
The committee was given examples of products that are taxable under the current scheme: off-the-shelf programs for office work (spreadsheets and word…
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