Cloud Storage Not Taxable in Idaho, Law Introduced to Clarify

BOISE, Idaho (AP) — The Idaho House Revenue and Taxation Committee has agreed to introduce legislation to clarify that cloud computing services delivered over the Internet aren't tangible goods subject to sales tax. The Spokesman-Review reports that high-tech businesses in Idaho made the request amid concerns about a bulletin issued by the Idaho Tax Commission in October interpreting a 1993 state law as saying software is taxable property no matter how it is delivered.

Jay Larson of the Idaho Technology Council says cloud computing involves people using the Internet to rent computing power, electronic storage space and other services. He says in recent months the state Tax Commission has told some high-tech firms they have to pay large amounts in back sales taxes. He says that has caused some businesses to consider moving out of Idaho.