The New York Division of Tax Appeals determined that the taxpayer’s sale of a document management services was a taxable sale of software. While the taxpayer argued that its service was a nontaxable, cloud-based platform-as-a-service, the ALJ disagreed. Instead, the ALJ concluded that the taxpayer’s software was the “core element” of the platform, and customers could do nothing with the platform without their use of the taxpayer’s software. Therefore, the ALJ determined that because software was the central element of the product, the customer was purchasing taxable prewritten computer software rather than a nontaxable service. 

NetVoyage Corp. aka NetDocuments.com, DTA No. 850246 (N.Y. Div. of Tax App. Apr. 24, 2025).