Colorado Department of Revenue Issues Guidance on Web Seminars and Cloud Collaboration Services

A taxpayer requested guidance on the application of Colorado sales tax to live online seminar fees, prerecorded online seminars, and fees to access self-study material online. The Department reviewed the taxpayer's transactions and found that charges to view live seminars online are not subject to Colorado sales tax because such charges are for an exempt service. However, charges to view prerecorded seminars online were subject to tax because unlike the live seminar, there was no student/instructor interaction. Therefore, the charge was for taxable training material rather than exempt instruction services. Similarly, the charge to access self-study material was also subject to tax due to the absence of instructor interaction.  

The full discussion can be found in Colorado Department of Revenue GIL-16-009.

Web Collaboration

The taxpayer in question offers web collaboration services. The cloud-based collaboration service consists of a web conferencing application that allows users to share their desktops through a web browser. The service does not include any tangible personal property. Customers access the service using their own devices.  

Colorado sales tax applies to intrastate telephone services. The Department found that the web collaboration services in question were teleconferencing services and further determined that the provision of teleconferencing is actually a telephone service. The taxpayer argued that its service was not a telephone service because they did not provide all the necessary connections to reach the teleconferencing service. The Department disagreed, finding that a service provider need not provide all the components of the teleconference service for it to be considered a taxable telephone service. The taxpayer further argued that the service was not an intrastate telephone service because the servers hosting the collaboration application were located outside the state.  The Department, viewing each "call" accessing the web collaboration cloud application to be a call to an out-of-state location, agreed and concluded the taxpayer's web collaboration services were exempt interstate telephone services. 

The full discussion can be found in Colorado Department of Revenue PLR-16-014.

About Ryan

Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the seventh largest corporate tax practice in the United States. With global headquarters in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a five-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 2,100 professionals and associates serves over 12,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at ryan.com.

Photo - http://photos.prnewswire.com/prnh/20160125/325377LOGO

TECHNICAL INFORMATION CONTACTS:

Jim Kranjc
Principal
Ryan
630.874.0412
[email protected]

Jeremiah T. Lynch
Principal
Ryan 
212.847.0113
[email protected]

Available Topic Expert(s): For information on the listed expert(s), click appropriate link.

Jim Kranjc
ProfNet - https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=112141

Jerry Lynch
ProfNet - https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=113520

SOURCE Ryan

Related Links

http://www.ryan.com