United States

Indiana: Software as a Service Exemption Enacted

Apr 02, 2018
From KPMG TaxWatch

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The Indiana regular legislative session ended with some key issues unresolved, and a special session will be held in May to address bills that were not finalized during the regular session, including a bill addressing conformity to federal tax reform. However, Indiana Governor Eric Holcomb accomplished one of his goals for the regular session- enacting legislation exempting Software as a Service (SaaS) from the state’s sales tax. Under Senate Bill 257, which was signed into law on March 23, 2018, effective July 1, 2018, a transaction in which an end-user purchases, rents, leases or licenses the right to remotely access prewritten computer software over the Internet, other private or public networks, or through wireless media, is not considered a retail sale transaction. As such, the transaction is not subject to sales and use tax. However, Senate Bill 257 makes clear that a retail transaction does include selling, renting, leasing or licensing the right to use prewritten computer software delivered electronically. The statutory section outlining the exemption expires on July 1, 2024. Please contact Dave Perry at 513-763-2402 with questions.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.