Massachusetts Reverses Course On Taxing Cloud Services

On November 8th, the Massachusetts Department of Revenue revised and reissued Letter Ruling No. 12-8, originally released July 16, 2012. The original ruling addressed the taxability of a cloud computing product comprised of remote storage and computing capacity where users elect to use software licensed from a third-party rather than their own software or open-source software. The original ruling determined taxability based on the Department's regulations providing licenses to use software on remote servers are taxable transfers.  The Department ruled the entire purchase price was subject to tax because the costs for cloud services were part of the purchase price for the software.