What began as another annual push by the House Committee on Ways and Means to remove a tax exemption on software as a service has ballooned into a proposal to additionally tax platform and infrastructure as a service. If advanced, consumers and nearly all of Vermont’s businesses that use cloud-based services would see considerable cost increases. This additional financial burden becomes particularly daunting for many businesses as they struggle from the economic fallout caused by COVID-19. The proposed taxes would cost Vermont’s technology industry at least $14 million annually by Fiscal Year 2025 and damage the state’s current tech-friendly reputation, while also disincentivizing the recruitment of remote workers.

By adding a new financial burden for those who may have otherwise capitalized on connectivity opportunities to access or provide cloud-based services, this tax proposal has the potential to negate much of the economic benefit that would otherwise be achieved through future state investments in broadband infrastructure. Please contact Vermont Chamber Government Affairs Director Charles Martin if you have questions or would like help providing your input to the Legislature.