By Christopher Lutz ( November 21, 2018, 1:16 PM EST) -- In a previous article, we discussed how Illinois taxes software. In a general information letter published in 2017, Illinois addressed how its taxation of canned and custom software would apply to cloud computing. The state explained that software as a service, or SaaS, is not subject to the retailers' occupation tax and SaaS providers are instead subject to the servicemen occupation tax.[1] Thus, providers of SaaS to Illinois customers will generally be subject to use tax on tangible personal property transferred as an incident to the sale of SaaS.[2] Of course, the Chicago personal property lease transaction tax may still apply to a variety of software licenses.[3] How does Illinois stack up to other states' taxation of digital products, specifically cloud computing?...
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