Vermont Repeals Exemption for Cloud Software

Date June 27, 2024
Article Authors

Vermont has enacted legislation repealing the sales and use tax exemption for prewritten computer software accessed remotely. As a result, cloud software, commonly referred to as SaaS (software as a service), will be taxable in Vermont as the state’s 6 percent sales and use tax rate as of July 1, 2024.

The repeal of the SaaS exemption does not impact the taxability of custom software, IaaS (infrastructure as a service), or PaaS (platform as a service), which remain exempt.

States vary in their tax treatment of software and SaaS in particular. Software vendors must actively monitor state developments to ensure proper taxation of their products.

If you have questions on the taxability of software or other state and local tax (SALT) matters, please contact the professionals of the HBK SALT advisory group at or 724-934-5300.

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