Vermont tax officials and lawmakers voted 4-3 early last week as an attempt to exempt business tax on cloud services. On December 17, members of the tax panel against taxation made an argument that the economic benefits of an exemption can outweigh lost tax revenue by keeping jobs and companies in the state.

Vermont has the smallest economy in the United States and has weak job prospects. In fact, the state’s unemployment rate dropped to 5.2 percent.

Usually, web hosts and cloud service provider take into consideration the taxation in a certain area before they expand into new states. The tax incentives can make or break construction deals.

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