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Idaho Movement to Tax Computer Software and Services

  • Sep 30, 2013 | Gail Cole

 There is a movement afoot to tax computer software and digital goods in Idaho.

Should computer software and services be subject to sales tax? Massachusetts lawmakers decided last summer that they should be. Then in a stunning reversal of policy, lawmakers ruled last week that computer software and services should be exempt and repealed the new tech tax.

Now the Idaho Attorney General has reviewed a proposed initiative to amend the Idaho Sales Tax Statute that seeks to pull computer software “out of the tangible personal property definition in Idaho Code § 63-3616” in order to create “a new taxable item outside tangible personal property.”  Under the proposed amendment, computer software would “include information stored in electronic media.” The initiative also seeks to define digital goods “separately from computer software.” Digital goods would also be subject to sales tax under the proposed initiative.

The proposed initiative is still in an early phase, and the attorney general brings to light several complications and issues the Petitioners must address before the initiative can make the ballot. For example, proposed changes to sales tax law would create additional revenue, and the Petitioners do not “identify the revenue impact… .”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.