Chicago Offers VDA For Cloud Products
In June 2015, the Chicago Department of Finance adopted Ruling #12 which sought to provide guidance on the taxability of “nonpossessory computer leases.” which the City interprets to include software as a service products and electronically delivered information services. An exemption exists for a non-possessory computer lease where the customer’s use or control of the provider’s computer is de minimis to the information being provided. How the City defines de minimis has been an area of controversy. Ruling #12, seeking to provide clarification, expanded the scope of products subject to the lease transaction tax to include most online or electronically delivered products.