State Tax Day - Current, S.5, New York—Sales and Use Tax: Cloud-Based Document Management Services Properly Deemed Taxable Prewritten Computer Software, (Sep 8, 2026)

The New York Tax Appeals Tribunal upheld an administrative law judge’s decision that a company’s cloud-based document management services were properly subject to sales and use tax as prewritten software rather than nontaxable document storage services. The Tribunal concluded that customers could not realistically use the company’s services without the software and that the software represented an essential element of the product sold. In addition, the Tribunal held that customer use restrictions did not negate a sale or license to use software, the Internet Tax Freedom Act (ITFA) did not preempt the tax, and the taxpayer did not prove that user location supported apportionment of the tax.

NetVoyage Corp. aka NetDocuments.com, New York Tax Appeals Tribunal, DTA No. 850246, August 27, 2026, ¶410-515