Cloud Services Not Subject to Florida Tax

Thursday, June 19th, 2014

 
 
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Florida
General

The Florida Department of Revenue ("Department") recently released guidance on the taxability of certain cloud services.

The taxpayer sold cloud services, including data storage and infrastructure as a service. Customers could use the taxpayer's computing resources to run applications, monitor computers and computer usage, and host web domains. The taxpayer used data centers in different states to provide these services. Customers did not have physical access to these data centers.

Florida taxes communications services under the Florida Communications Services Tax. "Communications services" are the transmission, conveyance, or routing of information or signals. Communications services do not include information services. "Information services" means offering the capability for generating, acquiring, storing, transforming, processing, retrieving, using, or making available information via communication services. The gross receipts tax applies to leases of real and personal property.

The Department held that the taxpayer's services were nontaxable information services. The taxpayer offered customers the capability for generating, acquiring, storing, transforming, processing, retrieving, using, or making available information. It did not charge customers to transmit, convey, or route information. This was therefore an information service, not a communications service. In addition, this was not the lease of property. Customers did not have physical access to the data centers or computers used to provide these services. Taxpayer's services were therefore not subject to the communication services tax or to the gross receipts tax.

https://revenuelaw.state.fl.us/LawLibraryDocuments/2014/03/TAA-118235_14A19-001%20REDACTED%20_%20SUMMARY.pdf


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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