States Pursue Sales Tax Revenue Vanishing Into Computing Cloud
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State sales tax systems created to generate revenue from face-to-face exchanges of tangible goods are struggling to keep up with the rapid shift of business transactions into the so-called cloud of the Internet.
As more companies use cloud-based servers and software, which are remote networks of computing resources often shared by multiple customers, the 20th-century rules of taxation no longer apply. Instead, accountants, lawyers, state tax officials and companies such as Google Inc., Apple Inc. and NetSuite Inc. are working to develop new guidelines for taxing the use of these emerging technologies.