Why we are passing on a sales tax charge on your billing this month.

Our PayCycle service was recently sold to Intuit. 

Intuit has taken the position, which we have objected to, that they are no charging sales tax for the use of their service.

We are passing on that sales tax to you and it will be reflected on your December statement.

See the email below.
 

Thank you for your inquiry dated 11/09/2009 regarding IL sales tax. We appreciate the opportunity to service your payroll needs.

I apologize for the inconvenience, we have issued you a credit for the sales tax on Monday, 11/03/2009. If you do not see the credit by Wednesday, 11/11/2009, please contact us.

Intuit Online Payroll, formerly PayCycle is not providing a service, but the right to use a prewritten software application.  The software is provided as a web based "Application Service Provider/ Software as a Service"  application (ASP or SaaS).  The States tax prewritten software as tangible personal property, whether or not the customer receives a tangible copy of the software; downloads the software; or uses an on-line ASP or SaaS version of the prewritten software.  Please note that both KPMG and Deloitte agreed that the taxability should be based upon an ASP or SaaS model and not the conventional payroll service model.  The Illinois Department of Revenue Regulations cites this in Title 86 Part 130 Section 130.1935 Computer Software.

We were glad to be of assistance and look forward to helping you with any future payroll needs.

If you have any questions, please do not hesitate to contact us over the web at https://onlinepayroll.intuit.com/elink?a=inquiry.

Thank you for choosing Intuit Online Payroll as your payroll partner. We appreciate the opportunity to serve you.

Sincerely,
Mark Dulay
The Intuit Online Payroll Support Team