Web Hosting Services Subject to Arizona's Transaction Privilege Tax

Monday, August 24th, 2015

 
 
An image of tax websites.
Share
Link
Arizona
Technology

The Arizona Department of Revenue (DOR) ruled that a web hosting business owed tax under the personal property rental classification for the gross income it received for various monthly web hosting plans.

Customers were charged a monthly fee to create their own websites using the business's software. The DOR ruled that the customers gained enough control of the software that the monthly fees were taxable as the rental of tangible personal property (i.e., the software). In addition, the various web hosting plans included processing services, access to third-party applications, and digital stock photography. Charges for these items were included in the tax base of the rental of the software and were therefore taxable.

Finally, the DOR determined that domain registration fees were taxable because the business could not identify what percentage of its fees were for domain registration. These fees therefore did not meet the requirements to be considered a separate line of business. As a result, they were also included in the tax base of the taxable monthly fees.

https://www.azdor.gov/Portals/0/PrivateRules/15-005-D.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.

Louisiana Sales Tax Rates and Exemptions Set to Change...

Friday, May 25th, 2018 -Louisiana's sales tax rates and exemptions are set to change July 1, 2018, when several 2016 law changes will ...

Florida Exempts Generators Used in Assisted Living...

Thursday, May 24th, 2018 -Florida recently adopted an emergency rule on exempt sales of emergency generators for use at nursing homes an...

Washington Penalty Reduction Program

Monday, May 21st, 2018 -Businesses that apply to register with Washington's Marketplace Fairness Penalty Reduction Program by June 30,...

Fuel Used to Heat Detached Garages Taxable in Maine

Monday, May 21st, 2018 -Maine Revenue Services recently released a publication explaining that sales tax applies to fuel that is used ...

Cloud Software No Longer Taxable in Indiana

Thursday, May 17th, 2018 -Effective July 1, 2018, cloud software will no longer be taxable in Indiana. Indiana taxes the sale, lease,...

Sales Tax Increase in the Historic Triangle Region of...

Monday, May 14th, 2018 -Effective July 1, 2018, there will be an additional one percent (1%) regional sales and use tax imposed in the...