Share on LinkedInShare on LinkedIn

ARTICLE · 24 SEPTEMBER 2012

DOR Provides Guidance On Cloud Computing Sales Tax Issues

Pierce Atwood LLP
Explore more from Pierce Atwood LLP

The DOR ruled that sales of cloud computing that involve the customer’s use of its own software or software available free on the Internet are not taxable when sold to customers in Massachusetts.

United StatesTax
Sarah Beard
Sarah Beard
Jonathan Block
Jonathan Block
Kris Eimicke
Kris Eimicke
Kathleen King Parker
Kathleen King Parker

The DOR ruled that sales of cloud computing that involve the customer's use of its own software or software available free on the Internet are not taxable when sold to customers in Massachusetts because they are not sales of prewritten software. However, sales of cloud computing that use software licensed by the cloud computing provider are taxable when sold to customers in Massachusetts, whether or not there is a separately stated charge for the software or whether or not there is a sublicense of the software to the customer. On the other hand, sales of remote storage service are also not taxable when sold to customers in Massachusetts because it is a nontaxable service. Also, the DOR ruled that separately stated data transfer fees are taxable telecommunications services when sold to customers in Massachusetts provided the sourcing rules in 830 CMR 64H.1.6(4) are met. Massachusetts Letter Ruling 12-8.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

GENIUS Act Crypto Tax Guide 2025-2026: What US Investors, Businesses, And Taxpayers Need To Know About The New Stablecoin Law, Form 1099-DA, And Digital Asset Regulation

The United States cryptocurrency regulatory landscape has undergone its most dramatic transformation in history. The signing of the GENIUS Act into law on July 18, 2025 — the first comprehensive federal crypto statute ever enacted — marks a before-and-after moment for American digital asset law.
United StatesTax
Rotfleisch & Samulovitch P.C.
Rotfleisch & Samulovitch P.C.
Article

A 5% Wealth Tax? Preparing Clients For California's Billionaire Tax Act

California's proposed Billionaire Tax Act would impose a onetime 5% excise tax on individuals and trusts with assets exceeding $1 billion, creating unprecedented challenges for estate planners. The retroactive application and anti-abuse provisions raise critical questions about the treatment of grantor trusts, non-grantor trusts, and beneficiary interests that deviate significantly from established federal wealth transfer tax principles.
United StatesTax
Withers LLP
Withers LLP
Article

IRS Proposes New Racial Nondiscrimination Regulations For Tax-exempt Private Schools

The US Treasury and IRS have proposed regulations that would eliminate longstanding exceptions allowing tax-exempt private schools to maintain race-conscious admissions and scholarship policies. Following the Supreme Court's decision in Students for Fair Admissions v. Harvard, these rules would apply to all private educational institutions, including K-12 schools not directly affected by that ruling, and could result in loss of tax-exempt status for noncompliance.
United StatesTax
McDermott Will & Schulte
McDermott Will & Schulte
Article

Proposed IRS And Treasury Rules Tie Racial Nondiscrimination To Tax-Exempt Status For Private Schools And Universities

On September 3, 2026, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued proposed regulations under Section 501(c)(3) that could materially affect private education in the United States. The proposal would apply a broad nondiscrimination standard based on race, color and national or ethnic origin, with significant implications for private schools, colleges and universities seeking or maintaining tax-exempt status under Section 501(c)(3).
United StatesTax
Buchanan Ingersoll & Rooney
Buchanan Ingersoll & Rooney