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Texas sales tax audit cloud based educational service

By June 21, 2022March 27th, 2024Texas Sales Tax

Texas sales tax audit for a cloud-based educational service

The Texas Comptroller of Public Accounts ruled that a cloud-based software program used by nursing and other professional healthcare students during assigned courses at accredited universities and colleges is an educational service and is not subject to tax. The program is accessed via the internet without any local software application installed on a user’s device. The program is not a taxable information service since it is neither the sale of general or specialized news or other current information, nor does it resemble any of the examples of services listed under Tex. Admin. Code § 3.342(a)(6) that gather, maintain, or compile information for the public or for a specific segment of industry. Additionally, although the program has elements of data processing, the program is not a taxable data processing service. The comptroller has exclusive jurisdiction to interpret whether services are taxable under Tex. Tax Code Ann. § 151.0101(b). The program provides educational instruction and evaluation to students for the courses provided by the accredited universities and colleges, and is not a data processing service and not subject to
Texas sales and use tax.
(Texas Private Letter Ruling No. 202206008L, 06/10/2022.)

Facing a sales tax audit in Texas? Contact our attorney for a consultation.

Ansari Law Firm

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