This week, the Senate unanimously approved the House changes to Senate Bill 257 (Sales Tax on Software). This bill began as a top Indiana Chamber goal; it was embraced by the administration and made a priority of the Governor, the Senate got it introduced and rolling, then the House took good legislation and made it even better.
The Senate concurrence vote means the bill is on its way to Gov. Holcomb and there will be SaaS (software as a service) tax clarity in Indiana!
This is exactly what the Indiana Chamber has been working toward since last summer and it is good news for the SaaS industry. Senate Bill 257 is a straightforward piece of legislation that can reap very real economic benefits for the state. We thank legislators for listening to our members and taking this important step forward to demonstrate Indiana’s commitment to embracing the growth of the SaaS industry. The legislation puts Indiana in a very favorable position to attract more and more of this burgeoning business to our state.
Senate Bill 257 (Sales Tax on Software) took a very positive turn this week when it was amended by the House Ways and Means Committee. After hearing considerable testimony from members of the Chamber’s Technology and Innovation Policy Committee in a hearing last week, it appears the message was received! That message: It would be beneficial to the software industry to provide simple clarity regarding the exempt status of software as a service (SaaS).
The Ways and Means Committee amendment deleted a good amount of language that we were concerned could raise new questions and run counter to the objective of reducing uncertainty about software transactions.
These changes make clear that it is only in the case where prewritten software is delivered electronically (downloaded) that the transaction is considered a retail sale subject to sales tax. And when someone buys the right to remotely access software, the transaction is not taxed. Through these positive amendments, the bill now more directly serves the objective of clarifying that SaaS transactions – those involving the use of software to essentially provide a service – are excluded from taxation.
The Indiana Chamber has been making the case for the need to eliminate the previously existing ambiguous language and convincing legislators that a clear, simple, straightforward piece of legislation can reap very real economic benefits. Our efforts are reflected in this much streamlined version of SB 257. We thank the Ways and Means Committee for listening to our members and taking this important step forward to demonstrate the Legislature’s commitment to embracing the growth of the SaaS industry in Indiana. The revised bill puts Indiana in a very favorable position to attract more and more of this burgeoning industry to our state.