in the State House of Representatives
on April 15, 2021, by a vote of
Purpose: Sections 9-12 of the underlying bill applied the state sales and use tax (6%) to cloud-based software services. These four sections were “divided” from the underlying bill, and this vote decided whether or not to keep the language in the bill.
Analysis: Applying the sales and use tax to “cloud-based” software services (platform services, software as a service, and infrastructure as a service) such as TurboTax, WordPress, Microsoft Office, Adobe products, music streaming services, etc. would cost Vermonters a total of $11, $12, and $14 million in each of the first three years of its implementation, according to the Joint Fiscal Office.
Those voting YES on this division question wanted to keep the Cloud Tax language in the underlying bill. They argued taxing internet based software services is “modernizing” the sales tax, and that the increased revenues would be necessary in the future when federal COVID rescue funds are no longer available.
Those voting NO on this division question wanted to strike the Cloud Tax language from the underlying bill, citing no need for a tax increase at this time given the state’s current $300 million revenue surplus, Vermonters are already over-taxed, such an expansive tax on Cloud Services would make Vermont an outlier and economically uncompetitive with other states. Additionally, noting that many businesses in the wake of COVID lockdowns have increasingly relied on cloud-based software services, being forced to shift sales from in-person to on-line. A new Cloud Tax is a kick while folks are down.
Read the Journal: "Shall the House propose to the Senate to amend the bill in the second division of amendments, Sections 9-12?, was decided in the affirmative. Yeas, 96. Nays, 44" (Pages p. 645 -647).
Watch the floor debate on YouTube
Related: JFO Fiscal Note
How They Voted
(Click on your Rep’s name to send an email)
Sally Achey (R - Middletown Springs) – NO
William Lippert (D – Hinesburg) – YES
Curtis McCormack (D – Burlington) – YES
Kirk White (P/D - Bethel) – YES
Rebecca White (D – Hartford) – YES
Dane Whitman (D - Bennington) – YES
Terri Lynn Williams (R - Granby) – NO
Theresa Wood (D – Waterbury) – YES
David Yacovone (D – Morristown) – YES
Michael Yantachka (D – Charlotte) – YES