The term “cloud computing” is broad enough to cover a vast array of transactions, all of which use the Internet in some fashion. Two of the most prevalent forms of cloud computing are “software as a service” (SaaS) and “infrastructure as a service” (IaaS). SaaS refers to transactions where software is accessed by a customer remotely over the Internet. The customer does not receive a copy of the software, and the software does not reside on the customer’s hardware. Rather, the customer gains access to the software typically by using its own Internet browser. IaaS refers to transactions where a customer remotely accesses hardware over the Internet. The customer never takes physical possession of the hardware. Rather, the customer accesses the service provider's hardware instead of purchasing and maintaining its own hardware.
Piggy-backing on my colleague Drew’s sales tax update last week on new use tax rules for yachts already in effect, I’m writing with another timely update on New York’s soon-to-be-effective sales and use exemption rules for “general aviation aircraft”.
In less than 40 days, the exempt status previously reserved only for “commercial aircraft” will be extended to include “general aviation aircraft” in New York, which include recreational planes, private and corporate jets and helicopters, etc.—basically, aircraft used in civil aviation that aren’t “commercial aircraft.” As part of the 2015-2016 budget bill, the New York Legislature adjusted the rules imposing sales and use tax on nonresident—and resident—aircraft owners alike. The Legislature added a new exemption to Tax Law section 1115 for general aviation aircraft, which is defined to include all aircraft “used in civil aviation,” except commercial aircraft used to transport persons or property for hire. It joins the exemption already on the books for sales and use tax on commercial aircraft primarily engaged in intrastate, interstate, or foreign commerce. The new rule will also exempt sales of machinery or equipment installed on the aircraft. The rule does not exempt drones—sorry, all you early adopters out there.
Fourth of July has come and gone. This year, nonresidents (more on this later) who brought a new boat to New York for the first time were hit with a breath of fresh air—and I’m not talking about the fresh air from [insert any of New York’s many boater-friendly bodies of water]. In years past, nonresidents who purchased a boat outside of New York and later brought that boat into New York were hit with full New York use tax on the purchase price or fair market value of that boat. As part of its 2015 budget, the New York State Legislature amended the sales and use tax rules applicable to boats.
Earlier this year, Governor Cuomo announced that 28 district attorneys’ offices around the state would receive grants totaling nearly $15 million under New York’s Crimes Against Revenue Program (CARP), which provides substantial monetary grants to district attorneys’ offices in the state to investigate and prosecute crimes against the public fisc. Using CARP funds, DAs in cash-strapped counties can secure resources for staff and other expenses to investigate and prosecute tax crimes. From what we’re seeing, they’re doing just that.