Par Brian E. Stromen
On November 3, 2021, the Mississippi Department of Revenue (“Department”) will hold a public hearing on its proposed amendment to the Department’s sales tax regulation on computer equipment, software, and services (Title 35.IV.5.06). The proposed rule amendment defines cloud computing, software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS) and provides that taxable services include “certain services, delivered through SaaS, PaaS, IaaS and other cloud computing models” without identifying the taxable services. Further, the amendment deletes the exclusion from Mississippi’s use tax for software “maintained on a server located outside the state and accessible for use only via the Internet,” making all cloud-based software used in the state subject to tax.
The Department’s notice of the amendment describes the proposed changes as clarifications of “the tax treatment of computer software sales and services when delivered through cloud computing.” A “clarification” usually means that the Department plans to apply the changes retroactively. In addition, neither the notice of amendment nor the proposed language addresses the taxation of licenses used by customers in multiple states or how or when Mississippi will allow credits for taxes paid to another state.
The public hearing will be at 1:30 p.m. on November 3, 2021 at the Mississippi Department of Revenue, 500 Clinton Center Drive, Clinton, Mississippi 39056. Anyone wishing to speak at the hearing must send a written notification to the Office of Tax Policy (address below) at least 72 hours before the hearing. The notification should include a brief description of the speaker’s presentation and the speaker’s position on the amendment. In addition, interested parties may send written comments on the amendment to:
Mr. Sam Portera, CPA
Deputy Office Director, Tax Policy
Mississippi Department of Revenue
Post Office Box 1033
Jackson, Mississippi 39215
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