Workshop MM - Cloud Computing Sales Tax Implications .What Is Cloud Computing? “Cloud computing

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  • 25thAnnual

    Tuesday&Wednesday,January2627,2016Hya Regency Columbus, Columbus, Ohio


    io T


    Workshop MM

    Cloud Computing Sales Tax Implications of Sales of Services and Digital Goods

    Wednesday, January 27 2:00 p.m. to 3:00 p.m.

  • Biographical Information

    Michael Twarozynski, Vice President, Finance Plex Systems, Inc., 900 Tower Drive, Suite 1400, Troy, MI 48098

    248-393-8890 Michael (Mike) Twarozynski has 26 years of finance and operations experience (over 10 years as CFO or COO) in high tech organizations such as software, telephony and electronics, most with multi-state operations. Mike has worked in very dynamic work environments: 3 high growth companies and 2 turnarounds. At Plex Systems, a manufacturing cloud company, in 2012 he managed the sale process of the company to Francisco Partners. Mike also recently successfully managed the voluntary disclosure agreement (VDA) process with 8 states and established processes for on-going state sales and use tax compliance. Mike holds a CPA and is a graduate of Michigan State University with a bachelors degree in accounting.

    Anthony Montelisciani, Executive Director, Indirect Tax Ernst & Young LLP

    1900 Scripps Center, 312 Walnut Street, Cincinnati, OH 45202 Phone 513 612.1573 Anthony (Tony) Montelisciani is an Executive Director with 21 years of state and local tax experience. He specializes in sales, use, gross receipts and transaction tax issues affecting the healthcare, hospitality, manufacturing, construction, and printing industries. Tony manages multi-state sales and use tax audits for Fortune 500 companies, supervises automated tax refund projects, negotiates audit settlements, supports litigation and tax controversy, composes and provides technical analysis for private letter rulings, directs compliance procedures and provides tax technical training to clients, firm personnel, and other tax professionals. He also offers technical expertise in personal property tax and state income tax. Prior to starting his career in public accounting, Tony was a state income tax analyst with experience in all aspects of corporate state income taxes including filing returns, managing audits, initiating protests and implementing tax saving strategies for Fortune 500 companies. Tony is a graduate of University of Cincinnati with a Bachelor of Business AdministrationAccounting Tony is a member of the Institute of Professionals in Taxation (IPT) and a Certified Member of the Institute (CMI) for Sales Tax. He is also a member of the Healthcare Financial Management Association (HFMA)

  • Biographical Information

    Steven E. Skiba, JD, CPA , Managing Director, State and Local Tax Services, Grant Thornton, 27777 Franklin Road, Suite 800, Southfield, Michigan 48034

    248.213.4265 Fax: 248.350.3581 Steve Skiba is a Managing Director in Grant Thorntons State and Local Tax Practice located in Southfield (Detroit), Michigan. Steves practice area is state and local taxation and he has extensive experience in sales & use tax and motor fuel excise tax. Experience Steve has over 24 years of experience in state & local taxation, including 18 years in public accounting. His extensive experience includes sales & use tax and motor fuel taxation as well as state & local tax audits, mergers & acquisitions, aircraft transactions, refund recovery and utility reviews, multistate compliance, tax matrixes, tax manuals, training, nexus studies, due diligence reviews and providing sales & use tax technical research assistance in conjunction with the implementation of third party sales & use tax software solutions. Professional qualifications and memberships Steve is a member of the American Institute of Certified Public Accountants, Michigan Association of Certified Public Accountants, and the State Bar of Michigan. He is a Certified Public Accountant and Attorney licensed in Michigan. Community involvement Steve is a volunteer with United Way and through his church with the Macomb County Rotation Emergency Shelter Team (MCREST) for the home-less. Education Steve earned a Bachelors degree in Accounting (Summa Cum Laude) and a Juris Doctor degree from Wayne State University. Contact details

    Rebecca Luck, JD, LLM, Executive Administrator, Tax Appeals Division Department of Taxation, 30 East Broad Street, 22d Floor Columbus, Ohio 43215

    614-466-6750(O) 614-466-8016(D)

    Rebecca began her career with the Department of Taxation January 1, 2012 as Legal Counsel to the Division of Tax Equalization. She was promoted to Executive Administrator, Tax Appeals Division, in December, 2014. Prior to her employment with the Department of Taxation, Rebecca was an attorney examiner with the Ohio Board of Tax Appeals. As an attorney examiner, Rebecca was responsible for a hearing docket which included appeals from decisions made by county boards of revision and budget commissions, municipal income tax review boards, and the Tax Commissioner. Rebecca is versed in personal income tax, sales and use taxes, commercial activity tax, pass-through entity tax, municipal income tax as well as various aspects of real property taxation. Rebecca is a proud graduate of three Ohio Universities, Miami University (BA), the University of Akron (JD), and Capital University (LLM).

  • OhioTaxConferenceJanuary27,2016

    CloudComputing SalesTaxImplicationsofSalesofServicesandDigitalGoods

    Presented by:TonyMontelisciani ,Ernst&YoungLLP


    MichaelTwarozynski,Plex Systems,Inc.


  • Agenda

    WhatisCloudComputing? Sales/UseTaxability Sales/UseTaxNexus MultistateSourcingIssues AnalyzingCloudComputingServices

  • What Is Cloud Computing?

  • DigitalProductsProductsandservicesprovidedorfurnishedelectronicallyviatheInternetCloud,suchas:

    CloudComputing SoftwareasaService,PlatformasService,InfrastructureasaService




  • WhatIsCloudComputing?

    Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or services provider interaction.

    The National Institute of Standards and Technology Definition of Cloud Computing, Special Pub. 800-145 (Sept. 2011) U.S. Commerce Department

  • WhatareCloudServices?

    SoftwareasaService(SaaS) InfrastructureasaService(IaaS) PlatformasaService(PaaS) BusinessProcessasaService(BPaaS)

    DatabaseasaService(DBaaS) DataStorageasaService(STaaS) SecurityasaService(SECaaS) ApplicationProgrammingInterfacesasa


    There are many types of activities that fall within the scope of cloud services:

  • "Software as a Product" "Software as a Service"

    Sales of goods and services have shifted gears


  • SoftwareasaService(SaaS)



  • CustomerusesCloudProviderscloudinfrastructureandtoolstobuildordeployapplicationsandcontent.Customerdoesnotmanageorcontroltheunderlyingcloudinfrastructurebutcontrolsitsdeployedapplications/content.3rd partiescanaccessthecustomersapplications/content.


  • InfrastructureasaService(IaaS)


  • CloudComputingProductPricingModels

    PayPerUse PayPerGigabyteUsed MonthlyorAnnualSubscription PayPerUser RevenueShare

  • OtherDigitalProducts

    OtherproductofferingsfurnishedviatheInternetCloudinclude: Informationservices Searchabledatabases Movies Songs Videogames Premiumlevelsubscriptionstoonlinesocial


  • Sales/Use Taxability

  • StatePositionsonDigitalProducts/CloudComputing

    Jurisdictionsmayregardatransactiontobetaxablebecausethejurisdictionconstruesthetransactiontobe: Ataxablesaleorleaseofprewrittensoftware,i.e.statutorytangible

    personalproperty(TPP) Constructivepossessionvs.physicalpossession


    AdigitalequivalenttotraditionalTPP Adigitalgoodorspecificdigitalgood Anenumeratedtaxableservice,e.g:

    Dataprocessing,datastorageservice DigitalAutomatedService CannedInformationServicesuchasdataprocessingorinformationserviceinthe



  • StatePositionsonDigitalProducts/CloudComputingOhio Automaticdataprocessing,electronicinformationservice,andcomputerservicesare

    consideredtaxableservices.OhioRev.CodeAnn.Sec.5739.01(B) Automaticdataprocessingmeansprocessingofothers'data,includingprovidingaccessto




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