On Mar. 26, the Idaho State Legislature passed the Cloud Services Clarification Act, a bill with far-reaching impacts on a growing tech industry in Idaho. A groundswell of support led by the Idaho Technology Council along with individual companies and impacted customers helped push the legislation forward.
TSheets, a time tracking technology company based in Eagle, became a driving force behind the issue. It started with a blog post from CEO Matt Rissell that went viral. That led to an interview for a feature article in the Wall Street Journal. Rissell, along with others in the industry, also testified before the Revenue and Taxation Committee in support of the bill.
The passage of the Cloud Services Clarification Act resolves a heated issue that has been flaring up over the last several months. The state tax commission and industry leaders had reached an impasse over the interpretation of tax code in relation to cloud-based services. Other services are not taxed in Idaho, and so, most assumed, that applied to subscription software delivered online, a precedent established in several other states.
Over a year ago, without a formal announcement to clarify the change, the state tax commission began to charge taxes on cloud-based services, even including backed taxes for the distribution and use of these online services.
"When a customer first told me what was going on, I just couldn't believe it," said Matt Rissell . "It was so wrong, and seemed like such an arbitrary way to read the tax code. I was really upset. So I wrote a post on our blog."
The blog post featured at www.TSheets.com became one of the most widely read in the company's history, and led to an interview for a lengthy article in the Wall Street Journal, "Idaho Wants to Tax the Cloud."
"Once I began shouting this from a mountaintop, I could not have been more thankful for the conversation I had with Jay Larsen, the president of the Idaho Technology Council," notes Rissell. Larsen and other members of the ITC brought together software companies in the area and the IT industry as a whole to rally around the issue.
"The legislature acted responsively and responsibly. They worked hard to understand the complexity of the issue, with both the tax implications and the technology in question," says Rissell. "In the end, it's a win-win all the way around. It will ultimately open the doors to other businesses making Idaho their home."
About TSheets :With clients ranging from small businesses to large international organizations, TSheets improves time and labor management with a cutting-edge time tracking application that replaces paper timesheets with a more accurate, mobile and flexible solution.
For more on the timekeeping functionality and features of TSheets, visit www.TSheets.com.