On January 16, a bill (H. 756) was introduced in the Vermont
Assembly that would repeal the sales and use tax exemption for
remotely accessed prewritten computer software. If enacted as
introduced, the exemption would no longer protect Vermont taxpayers
from this legally suspect tax beginning July 1, 2020.
This is not the first time the Vermont Legislature has
considered the issue of taxing cloud software. After the Department
of Taxes administratively issued guidance interpreting the sales
tax to apply to all prewritten software (including cloud-based
software) in 2010, legislative actions were taken to curtail this
administrative overreach—including a 2012 temporary
moratorium and the aforementioned 2015 exemption—to preclude
the imposition of sales tax on the mere accessing of prewritten
computer software.
