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Vermont: Prewritten Software Could Be Exempt Again


 It's hard to see the fate of the taxation of cloud computing services in Vermont.

Cloud computing services, widely used by businesses in all states, are subject to sales tax in some states and exempt in other. Vermont has tried both approaches.

Governor Peter Shumlin (D) in 2012 proposed permanently exempting cloud computing services from Vermont sales tax in order to stimulate business growth. For a while, Vermont even imposed a temporary moratorium on certain cloud computing services (it ended on July 1, 2013).

Prewritten software “bought or leased for the customers use on a disk, as a download, or accessed on a remote server" became subject to sales tax beginning July 2013. Shortly thereafter, legislation was introduced to exempt prewritten computer software. By summer 2014, the Vermont Department of Taxation was working to resolve “possible gray areas in the application of the tax.”

Vermont lawmakers are working to that end, too. Senate Bill 97, recently approved by the Senate, would exempt from sales tax charges “for the right to access and use prewritten software run on underlying infrastructure that is not managed or controlled by the purchaser or any related company.” If approved as written, it would take effect on July 1, 2015.

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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.