Overview
Arthur Rosen assessed state taxation of cloud computing services, noting that while various states “are asserting—to different extents—that cloud services are subject to their sales and use taxes, they are wrong. Their mistake is disregarding that the law requires there be a transfer of possession of the service provider’s software to its customer—case law in each of those states makes clear that the type of ‘possession’ over the software a buyer of cloud services receives is insufficient for there to be a taxable transfer.”
