It is becoming more common to purchase software online through the cloud or downloading it from the Internet rather than buying a disk loaded with software and installing it on your computer. If you purchased a tangible disk, chances are sales tax was charged at the point of purchase; but how do you tax a download or software from the cloud?
Like most other items, the taxability of software depends on the state. In both Texas and New Mexico, recent rulings deemed licensing software to residents in those states created a nexus for the selling company. Read the full article here.
It is important for companies to understand where they have nexus and to keep up with taxability and rate changes within those states and subsequent jurisdictions. Vertex Cloud can automate your sales and use tax process, and we have teamed up with leaders in the industry to help you determine where you have nexus. Learn more about our solutions.