Information Technology Disaster Recovery Services are not Taxable in Pennsylvania

Wednesday, April 27th, 2016

 
 
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The Pennsylvania Department of Revenue (DOR) issued a letter ruling explaining that membership fees for information technology (IT) disaster recovery services were not taxable. However, rental fees for the IT equipment provided in a disaster and related fees were subject to tax.

The company offered a disaster recovery service to customers. The customers paid membership fees for the right to access telecommunications equipment, servers, computers, software, and disks in the event of a disaster.

When a disaster occurred, customers were required to pay an additional fee to declare the disaster and daily or hourly usage fees for the IT equipment.

The DOR concluded that the membership fees were not taxable because disaster recovery is not a taxable service. However, the daily or hourly usage charges were taxable rentals of tangible personal property. Additionally, the fee to declare a disaster was taxable as a part of the rental charge for the equipment.

http://www.revenue.pa.gov/GeneralTaxInformation/TaxLawPoliciesBulletinsNotices/Documents/Letter%20Rulings/SUT/sut-16-001.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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