The Texas Comptroller of Public Accounts recently issued a
letter ruling regarding the taxability of information technology
infrastructure services accessed using the Internet, commonly
referred to as "cloud computing" services.1
Based on the facts presented by the business requesting the ruling,
the Comptroller determined that separately identified portions of
the cloud computing and Web services fell within the statutory
definition of taxable data processing services, telecommunications
services and information services. The letter ruling also discusses
local tax jurisdiction sourcing of the Company's services.
Background
The business (Company), which is headquartered outside Texas,
offers customers a cost-effective solution to maintain their
information technology infrastructure by allowing customers to
access server bandwidth and storage capacity via the Internet
(i.e., cloud computing services). The Company uses small clusters
of servers (located in Texas and
