sales tax on services and multistate taxation of software/cloud computing providers & users
DESCRIPTION
Sales Tax on Services and Multistate Taxation of Software/Cloud Computing Providers & Users. Edward Bernert ( [email protected] ) Janette Lohman ( [email protected] ) Todd Whittaker ( [email protected] ). What is cloud computing?. Cloud Computing - Definition. - PowerPoint PPT PresentationTRANSCRIPT
Sales Tax on Services and Multistate Taxation of Software/Cloud Computing
Providers & UsersEdward Bernert ([email protected])
Janette Lohman ([email protected])Todd Whittaker ([email protected])
What is cloud computing?
Cloud Computing - Definition
Image source http://www.entechcomputers.com/resources/what-is-cloud-computing/
Cloud Computing - Definition
Image source http://www.entechcomputers.com/resources/what-is-cloud-computing/
Cloud Hype Cycle
Source: Gartner, 2012
Software as a Service (SaaS)Infrastructure as
a Service (IaaS)Platform as a Service (PaaS)
Three types
• Infrastructure as a Service (IaaS)
Image source http://strawdogs.files.wordpress.com/2009/08/spaghetti-bowl.jpg
Three types
• Platform as a Service (PaaS)
Image source http://www.freedomdigitalnetworks.com/images/uploads/posts/images/offshore-platform-4.jpg
Three types
• Software as a Service (SaaS)
Image source http://energyzarr.typepad.com/energyzarrnationalcom/2011/09/will-binary-communications-survive.html
Pendulum swing
??
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How the Web Works
`
PC withWeb Browser
SaaS cloudhost
Internet
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PC withWeb Browser
SaaS cloudhost
Internet
How the Web Works
• Browser sends HTTP request as textGET /article.pl?sid=06/12/19/2256259/ HTTP/1.1Host: it.slashdot.org
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How the Web Works
• Server sends back HTTP responseHTTP/1.1 200 OKDate: Thu, 21 Dec 2006 21:31:30 GMTContent-Type: text/htmlContent-Length: 1354
<html><body><h1>Should JavaScriptGet More Respect?</h1>(more file contents) . .</body></html>
`
PC withWeb Browser
SaaS cloudhost
Internet
This is a “document,” containing text, formatting, and display instructions.
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PC withWeb Browser
SaaS cloudhost
Internet
How the Web Works
• Web browser examines document to identify and request other resources (e.g. images).
• Place elements and display to user
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PC withWeb Browser
SaaS cloudhost
Internet
How the Web Works
• Begs two questions:– Where is “the cloud?”– Where is “the software?”
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Where is “the cloud?”
• Asking the question is against cloud principles
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Where is “the software?”
• Is it a download?• Is it remote access?• Who runs it?
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Where is “the software?”
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PC withWeb Browser
SaaS cloudhost
Internet
A web browser doesn’t just display documents. It also runs programs written in a language called JavaScript.
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Where is “the software?”
`
PC withWeb Browser
SaaS cloudhost
Internet
So, is this “the software?”
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Where is “the software?”
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PC withWeb Browser
SaaS cloudhost
Internet
What does this end do?So, is this “the software?”
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Where is “the software?”
• Is it a download?• Is it remote access?• Who runs it?
No. Some program code is downloaded, but it provides no value without the part that stays on the server.
No. Parts run on the local machine as well as remotely. Not quite like timesharing.
Probably the most important legal question.
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Who runs it?
End users The company
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Who runs it?
End users The company“The software is obviously responding to what they do. End users are in the driver’s seat.”
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Who runs it?
End users The company“The software is obviously responding to what they do. End users are in the driver’s seat.”
“End users are just doing data entry. The software runs on our servers, stores data there, and makes decisions there.”
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Who runs it?
End users The company“You are charging users a monthly fee to use your software. You even call them ‘users’ and ask for their ‘username.’”
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Who runs it?
End users The company“You are charging users a monthly fee to use your software. You even call them ‘users’ and ask for their ‘username.’”
“They are users of the service we provide. Our service goes beyond data entry. We are paid for our business processes.”
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Who runs it?
End users The company“Service? Really? Who uses any software that doesn’t provide a service? ”
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Who runs it?
End users The company“Service? Really? Who uses any software that doesn’t provide a service? ”
“I’m not hearing a problem.”
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Who runs it?
End users The company“Service? Really? Who uses any software that doesn’t provide a service? ”
“I’m not hearing a problem.”
It’s a mess
Questions?
Download these slides!
http://bit.ly/CloudTax2