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ARTICLE · 18 JANUARY 2014

Utah Is Taxing the Cloud (or, This Cloud-Based App)

Reed Smith
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In a recently issued ruling, Utah issued a Private Letter Ruling concerning the taxability of cloud-based applications. A Utah corporation requested the Utah State Tax Commission to determine whether their cloud-based applications are subject to Utah’s sales tax.

United StatesTax
Kelley Miller
Kelley Miller
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In a recently issued ruling, Utah issued a Private Letter Ruling concerning the taxability of cloud-based applications. A Utah corporation requested the Utah State Tax Commission to determine whether their cloud-based applications are subject to Utah's sales tax.  The cloud-based applications support their customers' telecommunication equipment by instructing the equipment on how to process incoming and outgoing calls. Customers utilize the applications via their own equipment. A monthly fee is charged to customers.

Utah imposes a sales tax on various transactions, including sales involving the use of any article of tangible personal property that is granted under a license. Tangible personal property includes pre-written computer software, regardless of the manner in which the pre-written software is transferred.

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