Computer software tax (CGT) is a new taxation system that has been proposed in many jurisdictions, including New York City, which is trying to get the tax eliminated from the city’s budget.
The idea behind CGT is to get rid of all taxes on software, including payroll taxes, sales tax, and sales tax on software that is not used for the purpose of operating the company, like software that has not been sold or leased.
CGT also has been pushed by Microsoft, Google, Apple, and others.
Currently, software tax is set at 3.5% on sales of software, but in the new CGT system it is set to go to 10% on software sales.
According to Microsoft’s website, CGT taxes are “exceedingly progressive”, meaning that in many cases a software company that sells software to an individual in a jurisdiction with a higher tax rate than New York can only deduct the higher amount.
Microsoft is also looking at a 10% tax rate for software that goes to more than one jurisdiction.
Microsoft has said that it is “working to make CGT a reality for New York and the entire United States, and we’ll continue to keep you updated as we work through the details.”
If you would like to support Computer Software Tax, visit our donation page on Microsoft’s site.
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