Vermont House Passes cloud Tax On Websites And online Services, Changes To Corporate Taxes

MONTPELIER — The Vermont Home handed a wide-ranging tax invoice Friday that features a gross sales tax on cloud-based software program and companies, in addition to exemptions for army pensions and menstrual merchandise.

The invoice, SB 53, began out within the Senate as a proposed gross sales tax exemption for menstrual merchandise. However when it reached the Home, legislators tacked on quite a few main modifications to company tax construction.

The Home debated the laws late into the night time Thursday — voting on it piece-by-piece — after which gave it closing approval Friday.

The cloud tax provisions superior largely alongside get together traces Thursday night time on a vote of 96-44, with Republicans opposing the measure. Some legislators, and members of Vermont’s expertise sector, have raised considerations concerning the levy and the burden it may pose on companies.

The measure would take away an exemption for software program applications saved and accessed by customers over the web, thereby leading to a 6% gross sales tax. It could additionally impose a gross sales tax on cloud “infrastructure” companies, resembling information storage, networking and web site internet hosting. The tax would apply to quite a few totally different on-line companies together with these supplied by TurboTax, Dropbox, Mailchimp, and web site hosts resembling Squarespace and WordPress.

Proponents of the cloud tax say it will maintain Vermont’s tax system consistent with the altering economic system. Twenty-one different states even have some type of cloud tax.

Seventeen states started taxing cloud companies in 2019,

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