Dentons SALT Insights: Kentucky Department of Revenue: SaaS Provider’s App Not Subject to Sales Tax

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Dentons SALT Insights: Kentucky Department of Revenue: SaaS Provider’s App Not Subject to Sales Tax

Dentons SALT Insights: Kentucky Department of Revenue: SaaS Provider’s App Not Subject to Sales Tax

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December 10, 2021

Cloud-based computing has increasingly become the go-to for individuals and businesses looking to securely store their data, files, photos, and more. Given the ever-evolving nature of this technology, questions often arise as to how the sales and use tax applies to transactions related to cloud-based software and ancillary services. In Private Letter Ruling KY-PLR-21-01 (“PLR”), the Kentucky Department of Revenue (“KDOR”) recently determined that an application provided as part of a Software as a Service model, also known as SaaS, was not subject to Kentucky sales tax.

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