Taxing Online Services

Digital services are changing taxation. You've heard of "the cloud" — that vast network of remote computers where you can store data, documents, music and the like. More importantly, it's also where an increasing number of actual applications live — Google Docs, Dropbox and Microsoft Office 365, to name a few.

But here's the thing. In Massachusetts, buy a regular piece of software for use on your home hard drive, and you have to pay sales tax. Buy access to similar software in the cloud, and it's tax-free. That's according to a recent decision by the state's Department of Revenue.

From Philadelphia, Kelley Miller, tax attorney for Reed Smith and contributor to the Taxing Tech blog, joins us to discuss taxing online services.

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