Roper: The ‘cloud tax’ is back

By Rob Roper

For years, legislators on the left have been eager to tax so called “cloud” services, or, as the legal language refers to them, “specified digital products transferred electronically to an end user regardless of whether for permanent use or less than permanent use and regardless of whether or not conditioned upon continued payment from the purchaser; or … vendor-hosted prewritten computer software and the right to access and use vendor-hosted prewritten computer software to perform data processing services.”

Rob Roper is the president of the Ethan Allen Institute.

In English, think Spotify, Pandora, TurboTax, Adobe products, Microsoft Office, Netfilx, Hulu, etc. and so on ad infinitum.

All these things, should this pass, will cost Vermonters 6 percent more to use (7 percent in places with a local option tax), amounting to annual overall tax increases of $11, $12, and $14 million over 2023, 2024, and 2025.

This is a first step toward expanding Vermont’s sales tax to all services, as recently recommended by the Vermont Tax Commission.

This is the injury. The insult is where this little tax increase language has been tacked on: S.53 – An act relating to exempting feminine hygiene products from the Vermont Sales and Use Tax.

S.53, as passed by the Senate, was a “clean” bill simply removing the sales tax from purchases of feminine hygiene products. Good thing! We favor fewer taxes, and this is no exception. But now the House is loading up this bill with other provisions that will result in a significant overall tax increase on Vermonters. Not just the “cloud” service tax, but also an overhaul of Vermont’s corporate tax structure (overall, bad), and an income tax exemption for the first $10,000 of military pensions (good).

So, what do feminine hygiene products have to do with Netflix, military pensions, and corporate tax rates? Nothing. The issues should be treated either separately or as parts of different bills. Don’t let the politicians use the cover of good tax decreases on feminine products and military pensions to hide the stink of two major tax increases on Vermonters.

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Flickr/

6 thoughts on “Roper: The ‘cloud tax’ is back

  1. Government needs to take the people’s money in order to give the people money. How else would it work?

  2. Don’t forget all the surcharges the utilities collect on their bills which are additional state/local taxes passed onto consumers. I’m paying a surcharge on my GMP bill for a bug – the Ash tree bug! The Government and their corporate partners will separate you from your money one way or another and they want it all.

  3. Notice they want to tax everything that moves…..

    except for the golden calf, pornography.

    If you look on a porn site you will find they are all “coincidentally” working very hard to break up the family. How could porn break up a family?????

    If you look on the site, it is painfully, painfully obvious. Military from other countries who deal with subverting their enemies purposely try and break the foundation of a country, the family. While it might seem a ludicrous thing to say you could confuse an entire nation about their sexuality and the break down of the family. Just pause a moment…..think about all that is currently going on.

    How did the world suddenly have all the topic and fights we are having in the last 2 years?

  4. As I’m sure you’ve noticed, Montpelier has been expanding sales taxes all along. Turbotax and pay-per-view movies are already taxed. So is shipping. I had my camera cleaned (a service) and that was taxed. When I questioned it, the store’s accountant said the VT Tax Department told them to consider it a repair because they use a cleaning kit to do it. By the same logic…

    Vermont imposed the sales tax in 1969 and has steadily increased it since, from 3 percent to 4 percent in 1982, to 5 percent in 1991, and to 6 percent in 2003. Since then, the legislature has steadily expanded the list of items taxed: All beverages but milk and water were added to the list a few years back, along with rooms and meals tax on grocery store items like roasted chicken and single bagels. We even pay sales tax on purchases at the Vermont State Liquor monopoly. On July 1st we will start paying a Universal Service Charge on retail sales of prepaid wireless telecommunications services (on top of the sales tax).

    The majority in the legislature fancy themselves as Robin Hood’s band, but in fact they have become the Sherriff of Nottingham’s retainers.

  5. The truth is they just don’t have the grapes to call it what it is because it might hurt their re-election when people look at how they voted on certain bills. “Oh, they voted to eliminate the tax on fem. prods. that was good of them”. as opposed to ” OMG they put a tax on everything I have on my computer” The sheep are so easily manipulated.

  6. Cloudy thinking. Just another attempt to deter and prevent Vermont citizens from be able to create independent private sector businesses which would bring more jobs opportunities for Vermonters. Their aim is to keep as many voters as possible destitute and dependent on Vermont government programs for their income.

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