Okay, so you’ve read the title and passed out already … but wait – this is good stuff! Well, maybe not “good,” but at least it’s relevant. The esteemed governor of Texas with the big Texas hair (and aspirations of taking his big hair out of Texas) recently signed House Bill 1841 (HB1841) into law, and that law is significant to many of SoftLayer’s customers.
Last year, the Texas Comptroller’s Office amended a regulation and stated that the use of a server in Texas was adequate to establish a nexus, so an e-commerce vendor who used a Texas web host was required to collect sales tax from their customers even if the vendor had no other presence in the state of Texas. This amendment immediately created issues for web hosts with data centers in Texas: Why would customers get servers from a host in Texas and have to worry about this tax obligation, when they could do business with another host outside of Texas and not have this obligation?
Well, the Comptroller’s Office started to realize the effect of this regulation and began to backpedal and say that they didn’t really mean what they said.
HB1841 puts the Texas hosting industry back where it was before the Comptroller made those changes: The use of a server located in Texas without any other presence is not considered a substantial nexus for collecting sales taxes. HB1841 specifically states that “A person whose only activity in this state is conducted as a user of Internet hosting is not engaged in business in this state.” Note: You may be wondering if this bill applies to Amazon in Texas, but HB1841 doesn’t cover Amazon because they had a physical presence in Texas (albeit one operating under a different affiliate with a different name), requiring them to pay sales taxes.
Our very own Brenk Johnson was involved in the effort to pass HB1841. He attended a couple of committee hearings, and he’ll tell you his mere presence got this out of committee and in front of our governor. He is quoted as saying, “I can sit in a meeting with the best of them.”
At the risk of making this blog sound like an Academy Awards reception speech, we would like to thank Jeff Clark and the crew over at TechAmerica for helping to get this bill passed. TechAmerica is a technology advocacy group that we recently joined, and they have a cracker-jack lobby group. Our CFO and I were on the verge of hiring a lobbyist for the 2009 Texas session, but we ended up not doing so. Two years later, we decided to go with this industry group, and the verdict is that TechAmerica has been a great investment … It was also through this group that Lance became a Cloud Commissioner! We also want to thank our competitors over at RackSpace, especially their General Counsel Alan Schoenbaum, for getting us involved and for leading and spearheading the passage of this bill … What was good for the goose was good for the gander on this one.
Because we are back to where we were a couple of years ago in the definition of nexus with relationship to hosts with data centers in Texas, this was not really a game-changing bill. It was important to clarify and undo the damage caused by the waffling that occurred in the State’s Comptroller’s Office, so in that sense this was a good bill for the industry. Next session we’re going to aim for the game-changer: Margin taxes!
-Suzy
- Lilah Brown's Planets, Part II (or, Season II preview) - November 8th, 2009 [November 8th, 2009]
- Snow White needs a bailout - November 8th, 2009 [November 8th, 2009]
- To the moon - November 8th, 2009 [November 8th, 2009]
- S/1 90482 (2005) needs your help - November 8th, 2009 [November 8th, 2009]
- We'll always have Regulus - November 8th, 2009 [November 8th, 2009]
- Orcus Porcus - November 8th, 2009 [November 8th, 2009]
- Kant's Crowded Universe - November 8th, 2009 [November 8th, 2009]
- Look up! - November 8th, 2009 [November 8th, 2009]
- Baby Pictures - November 8th, 2009 [November 8th, 2009]
- Encore: Yelping at Saints - November 8th, 2009 [November 8th, 2009]
- Godspeed - November 8th, 2009 [November 8th, 2009]
- Heavens above! - November 8th, 2009 [November 8th, 2009]
- Homeward bound - November 8th, 2009 [November 8th, 2009]
- Sony Pictures and the end of the world - November 8th, 2009 [November 8th, 2009]
- Thank you from the future - November 8th, 2009 [November 8th, 2009]
- Lunar dreams - November 8th, 2009 [November 8th, 2009]
- The first of the Pluto books! - November 8th, 2009 [November 8th, 2009]
- Don't try to blame it on Rio - November 8th, 2009 [November 8th, 2009]
- Rio roundup - November 8th, 2009 [November 8th, 2009]
- The long road to a Titan storm - November 8th, 2009 [November 8th, 2009]
- Planetary Placemats - November 8th, 2009 [November 8th, 2009]
- Fog! Titan! Titan Fog! (and a peer review experiment) - November 8th, 2009 [November 8th, 2009]
- Millard Canyon Memories - November 8th, 2009 [November 8th, 2009]
- The problem with science - November 8th, 2009 [November 8th, 2009]
- P.S. on the problem with science - November 8th, 2009 [November 8th, 2009]
- How Big is 10 TB? - November 8th, 2009 [November 8th, 2009]
- Showing You Your Servers - November 8th, 2009 [November 8th, 2009]
- Pick Your Partnership: Referral Partners, Resellers and Affiliates - November 8th, 2009 [November 8th, 2009]
- Server Form Factors: Towers v. Rack-Mounts - November 8th, 2009 [November 8th, 2009]
- Lights-Out in the Data Centers - November 8th, 2009 [November 8th, 2009]
- Disruptive Technologies: Virtualization and The Cloud - November 8th, 2009 [November 8th, 2009]
- Know Thy Backups – Part I - November 8th, 2009 [November 8th, 2009]
- Know Thy Backups – Part II - November 8th, 2009 [November 8th, 2009]
- Boo Bash 2009 – Desktop Costume Included! - November 8th, 2009 [November 8th, 2009]
- Why No One Will Talk About “Cloud Computing” in 10 Years - November 8th, 2009 [November 8th, 2009]
- The end of the fall - December 13th, 2009 [December 13th, 2009]
- We Love ‘Server Huggers’ - December 13th, 2009 [December 13th, 2009]
- All About the Cloud: An Interview with Dell’s Cloud Evangelist - December 13th, 2009 [December 13th, 2009]
- Happy Solstice - December 21st, 2009 [December 21st, 2009]
- A ghost of Christmas past - December 31st, 2009 [December 31st, 2009]
- Learning from a Blender - January 5th, 2010 [January 5th, 2010]
- Changing my world - January 6th, 2010 [January 6th, 2010]
- A Server. From Scratch. - January 7th, 2010 [January 7th, 2010]
- The Planet Sand Castle: Upgrade Your Sandbox - January 12th, 2010 [January 12th, 2010]
- Hosting for Haiti - January 20th, 2010 [January 20th, 2010]
- Redefining Value - January 26th, 2010 [January 26th, 2010]
- My Experience as a Newbie at The Planet - January 28th, 2010 [January 28th, 2010]
- Confessions of Another New Planeteer - February 1st, 2010 [February 1st, 2010]
- How I Learned to Stop Worrying and Love Permissions - February 11th, 2010 [February 11th, 2010]
- Where at The Planet is Rachel? - February 15th, 2010 [February 15th, 2010]
- The Planet Storage Cloud: FYI - February 19th, 2010 [February 19th, 2010]
- Meet us in March - February 25th, 2010 [February 25th, 2010]
- The Planet in “The Channel” - March 2nd, 2010 [March 2nd, 2010]
- The Planet Server Challenge - March 13th, 2010 [March 13th, 2010]
- The Definitive Guide to Finding The Planet at SXSW - March 13th, 2010 [March 13th, 2010]
- The SXSW Iron Geek Champion! - March 15th, 2010 [March 15th, 2010]
- Drinking from the Fire Hose - March 16th, 2010 [March 16th, 2010]
- The Fastest Hands at SXSW - March 17th, 2010 [March 17th, 2010]
- System.out.println(“Hello World!”); - March 22nd, 2010 [March 22nd, 2010]
- Westmere – Get it Here - March 23rd, 2010 [March 23rd, 2010]
- Orbit on Your iPhone: A Sign of Things to Come - March 24th, 2010 [March 24th, 2010]
- #ShowMeMyServer 2.0 - March 25th, 2010 [March 25th, 2010]
- Get to Know Your Visitors - March 30th, 2010 [March 30th, 2010]
- The Next Big Thing in Hosting: The Hostatulator - April 1st, 2010 [April 1st, 2010]
- Storage Cloud and the City - April 4th, 2010 [April 4th, 2010]
- American Heart – Why I Walk - April 7th, 2010 [April 7th, 2010]
- The Cake Shouldn’t Be a Lie - April 8th, 2010 [April 8th, 2010]
- April Showers Bring May Flowers - April 9th, 2010 [April 9th, 2010]
- First at The Planet: Nehalem EX 4-Socket Servers - April 15th, 2010 [April 15th, 2010]
- Intel Guest Blog: Xeon 5600 - April 16th, 2010 [April 16th, 2010]
- Inside the Office: A Birthday Surprise - April 18th, 2010 [April 18th, 2010]
- The Planet @ Cloud Expo East - April 19th, 2010 [April 19th, 2010]
- The Planet @ ad:tech SF - April 22nd, 2010 [April 22nd, 2010]
- ad:tech Server Challenge - April 22nd, 2010 [April 22nd, 2010]
- ad:tech Panel: Developing Communities Online - April 23rd, 2010 [April 23rd, 2010]
- The Planet @ Interop Las Vegas - April 27th, 2010 [April 27th, 2010]
- Overflowing With Value: 10TB is Back! - April 28th, 2010 [April 28th, 2010]
- The Cloud is NOT the Revolution - April 29th, 2010 [April 29th, 2010]
- The Importance of Orbit 2.0 - May 5th, 2010 [May 5th, 2010]
- The Planet @ Web 2.0 Expo - May 6th, 2010 [May 6th, 2010]