Cloud computing, in which customers access data stored in remote servers, is a service, not a purchase of goods, so it shouldn't be subject to the state's sales tax, Boise Metro Chamber of Chamber of Commerce officials say.

Some Idaho technology companies are upset at audits from the Idaho Tax Commission in which they are being told they owe thousands or hundreds of thousands of dollars in back sales taxes. The Tax Commission considers cloud-computing services akin to software purchases, which are taxable.

Matt Rissell, owner of Eagle-based Tsheets, a time-tracking service for employers, said continued sales taxes on cloud computing could be a "death knell" for the tech community in Idaho.

Chamber officials say the Tax Commission is applying a half-century-old statute to tax services on remote servers. Use of remote servers to provide data services was never contemplated when the law was passed, so the law should be clarified, chamber officials said.

“The chamber has always supported Idaho’s growing technology industry and believes that a fair, clear, and evenly applied tax structure is the best approach to keeping and attracting new technology businesses to the state,” said Bill Connors, chamber president and CEO.