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Florida's Bob Ross Cloud: Happy, Puffy and Tax-Free




by:
Andrew D. Appleby
Stephen Burroughs
Sutherland Asbill & Brennan LLP - New York Office

 
July 3, 2014

Previously published on June 25, 2014

The Florida Department of Revenue determined that the sale of remote storage and cloud computing services, along with related data transfer fees, are information services not subject to Florida sales tax or Communication Service Tax (CST). The taxpayer’s remote storage service grants customers access to servers for data storage. The taxpayer’s cloud computing service, which falls into the Infrastructure as a Service model, provides computing resources. The taxpayer also charges a data transfer fee when a customer requests data be transferred to a specific server location. The Department determined that neither the remote storage nor cloud computing services offered by the taxpayer involve a customer paying for the transmission or routing of information. Rather, each offers a customer the capability to store and retrieve data—hallmarks of a nontaxable information service. Further, the Department determined that the taxpayer does not provide licenses for software or tangible personal property with the remote storage or cloud computing services because a customer need not download software or have direct use of the taxpayer’s servers to utilize the services. And while data transfer utilizes a communication service to move customer data between servers, the charge is for making “the data or the computing power available [and] accessible” at a specific data center location, not “the ability to ‘transmit, convey, or route’ data.” Fla. Dep’t of Revenue, Tech. Asst. Advisement, TAA 14A19-001 (Mar. 13, 2014).

 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
Andrew D. Appleby
Sutherland Asbill & Brennan LLP
 
New York Office
Practice Area
 
Taxation
 
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