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Virginia provides tax guidance for software companies and cloud computing services

The Virginia tax commissioner recently addressed the application of corporate income tax and sales and use tax standards to cloud computing services in the Commonwealth. According to the ruling, cloud computing services are treated in the same manner as electronically downloaded software and thus not subject to Virginia sales tax. For corporate income tax purposes, the ruling explains that merely purchasing cloud computing services from an independent contractor, without any other presence in Virginia, won't cause a taxpayer to establish nexus in the Commonwealth.

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