Clarifying the Cloud: Taxation of Software in Illinois

Determining whether computer software is taxable is no easy task, especially in light of the changing technological landscape. The Illinois Department of Revenue ("Department") has been asked by taxpayers for a number of years to provide clarification, but until recently has been largely silent on the treatment of sales of computer software. In several non-binding General Information Letters ("GIL") and Private Letter Rulings ("PLR"), the Department has recently provided clarification on several key issues, including the taxability of cloud computing.