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Taxing The Cloud Brings Practical Challenges
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Lorna Garey
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Lorna Garey,
User Rank: Author
8/23/2013 | 1:51:38 PM
re: Taxing The Cloud Brings Practical Challenges
Joe, Do you think cloud taxation will end up a state-by-state patchwork, or will the federal government get in on it?
JoeDonovan
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JoeDonovan,
User Rank: Apprentice
8/26/2013 | 3:13:51 PM
re: Taxing The Cloud Brings Practical Challenges
I think likely the former Lorna, because Congress doesn't like to tread on the discretion of the states to raise money; it's very sensitive. "Patchwork" is a good way to put it!
moarsauce123
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moarsauce123,
User Rank: Ninja
8/29/2013 | 11:29:30 AM
re: Taxing The Cloud Brings Practical Challenges
And that is the main problem. If all states would charge the same sales / value added / use tax and municipalities or counties could not tack on additional taxes to that then the math and with that the administration would be much easier. And it truly would level the playing field.
Right now, I live in a county that charges overall 1% more tax than the county next door. Places like Montana do not charge anything and some places in New Mexico charge as high as 15%.
The state centric, narrow minded, everybody does something different taxation approach just doesn't work for a global anywhere model. State and federal governments need to come together and figure this out first before putting taxes on services. Otherwise we all share the same PO box somewhere in Montana...
Laurianne
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Laurianne,
User Rank: Author
8/23/2013 | 6:25:25 PM
re: Taxing The Cloud Brings Practical Challenges
Which approach would be least painful for providers like Amazon and Google to deal with?
JoeDonovan
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JoeDonovan,
User Rank: Apprentice
8/26/2013 | 3:17:04 PM
re: Taxing The Cloud Brings Practical Challenges
Hi Laurianne. For providers the least painful approach is to take a certificate from the purchaser taking responsibility to pay the use tax. But not all states will go with that kind of system. Absent that, the least painful approach would be to have the tax follow the billing address of the customer, but as I said, they'll be resistance to that because it's subject to manipulation. Thanks for reading!
Laurianne
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Laurianne,
User Rank: Author
9/4/2013 | 7:54:24 PM
re: Taxing The Cloud Brings Practical Challenges
Having the tax follow the billing address of the customer would send lots of people in my home state of Massachusetts offline, and over the border to a physical store in New Hampshire.
WKash
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WKash,
User Rank: Author
8/23/2013 | 7:28:05 PM
re: Taxing The Cloud Brings Practical Challenges
Interesting to note, attorney's for Microsoft have been working behind the scenes with a number of international players trying to work out ways to address outdated laws concerning data storage and privacy rights when data moves from country to country on cloud servers. Add to that outdated tax laws too.
sloweymcmanus
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sloweymcmanus,
User Rank: Apprentice
8/26/2013 | 2:34:13 PM
re: Taxing The Cloud Brings Practical Challenges
In a virtual world, maybe we should all just pay virtual taxes.
Lorna Garey
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Lorna Garey,
User Rank: Author
8/26/2013 | 6:43:22 PM
re: Taxing The Cloud Brings Practical Challenges
And then we could send our virtual military to keep the Suez Canal open, and virtual FDA inspectors could protect us from contaminated baby formula? Seriously, everyone wants services, no one wants to pay for them. It's human nature, but not practical in the real, messy world.
BillDill
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BillDill,
User Rank: Apprentice
8/29/2013 | 9:47:08 PM
re: Taxing The Cloud Brings Practical Challenges
Thankfully, the cost of owning and maintaining the hardware is decreasing with every passing year. With Open Source PaaS like www.appscale.com, www.flynn.org, etc. It's making it easier to avoid the pitfalls of a public IaaS/PaaS.


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