Toby Bargar | Source | Senior Tax Consultant (Communications) at Avalara

Cloud computing can be thought of as a number of things, including storage, processing, SaaS, virtual networks and voice systems. What’s tricky is that any of these definitions of cloud computing could potentially be taxed differently. The same can be said for digital goods because of the different types, delivery methods and monetization models they can take. For example, digital goods come in different types of content like video, audio, software and games. They can also be delivered in different ways like download and streaming, and with different monetization models including direct sale, rental and subscription. Every one of these combinations can lead to a different tax determination and even impose areas with special taxes or utility and communication taxes.