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IRS Proposes Rules for Classifying Cloud and Content Digital Transactions

The U.S. Internal Revenue Service (IRS) has proposed regulations (REG-130700-14) to clarify how to classify transactions involving digital content and cloud computing. The new rules are designed to help taxpayers decide whether an electronic-commerce transaction is a sale, lease, license, or provision of services when applying various international provisions of the Code, such as sourcing rules and Subpart F. While existing regulations address how to classify transactions involving computer programs, none explicitly cover most transactions involving items such as movies in digital format or cloud computing. Read more at the Journal of Accountancy.