The US state of Vermont has enacted a new bill that makes changes regarding the taxation of remotely accessed software. The legislation was approved despite a veto from Vermont’s Governor Phil Scott.
The bill categorises taxable tangible personal property as prewritten computer software, regardless of how it is paid for, delivered, or accessed.
Tangible personal property means property which may be seen, weighed, measured, felt, touched, or in any manner perceived by the senses 32 V.S.A. section 9701(7).
Vermont generally imposes the Vermont Sales Tax on retail sales of tangible personal property. Tangible personal property is defined to include prewritten computer software in 32 V.S.A. section 9701(7).
However, prewritten software accessed remotely and not installed on a computer does not fall within this definition. Prewritten software that is downloaded from the internet and installed on a computer, as well as software delivered by portable storage media, falls under Section 9701(7) definition of taxable tangible personal property.
This change will go into force starting 1 July, 2024.
