Detail explanation of sales tax and give example: 21. The MicroBig Corporation provides various offerings to customers; for example customers seeking to compute their tax returns can access their server and get their retrurns prepared on MicroBigs server. In addition, MicroBig provides a service storing taxpayers tax return filing. Finally, MicroBig provides networking capability to assist taxpayers and their advisors to have online meetings with the IRS. Discuss how this offering could be taxed as (1) a taxable service, (2) a taxable retail sale of TPP, or (3) something else. Here they are hitting upon the vast area of “software as a service” or “SaaS”. This is the wave of the future. Why charge people for software when you can collect an annual subscription. It used to be you bought Microsoft Office to load onto your computer. I understand now that you subscribe to it. Just the way you subscribe to newspapers, TV channels, warrenties, even refrigerators. OK—back to taxation. Clearly this could be taxed as a service if the legislature simply enacts this as a taxable service. Duh? End of story. If the legislature has not enacted this perhaps the tax administrator can try to tax this as a lease of software or storage. This might be very difficult since the taxpayer does not have title or possession of anything.

The taxation of MicroBig Corporation's offerings can be complex, as it involves elements of software as a service (SaaS), data storage, and online communication services. The taxability of these services can vary significantly depending on the jurisdiction and how the state tax laws are written and interpreted. Here's how each offering could potentially be taxed: 1. **Taxable Service**: Many states have expanded their tax laws to include certain services as taxable. If the state legislature has specifically enacted laws that classify SaaS or data storage services as taxable, then MicroBig's offerings could be subject to sales tax as a service. For example, if a state considers electronic tax return preparation and storage services as taxable, customers accessing MicroBig's server to prepare their tax returns and store them would be required to pay sales tax on the fees charged by MicroBig. 2. **Taxable Retail Sale of TPP**: While MicroBig's offerings are not traditional tangible personal property (TPP), some states have broadened the definition of TPP to include digital goods or have specific statutes that treat certain digital services as the equivalent of TPP for tax purposes. If the state tax code considers the use of software on a server (even without transferring title or possession) as a lease or rental of TPP, then MicroBig's services could be taxed similarly to a sale of software. For example, if accessing the tax preparation software is deemed a lease of TPP, then the service could be subject to sales tax. 3. **Something Else**:

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