Data Storage Services Are Taxable as Software, NY Judge Rules

A Utah company must collect New York sales tax on its document management services because they are essentially sales of taxable prewritten software, a New York administrative law judge ruled in an opinion released Wednesday.

“Software is the core element of petitioner’s platform and none of the functions could be accomplished without petitioner’s development and the customer’s use of the software,” Administrative Law Judge Winifred M. Maloney wrote for the New York Division of Tax Appeals.

• NetVoyage Corp., also known as NetDocuments.com, provides cloud-based storage to financial and law firms including Nixon Peabody LLP and Milbank LLP
• After an audit ...