Posts Tagged 'House'

July 11, 2011

Texas House Bill 1841: Hosting and Taxes

Okay, so you've read the title and passed out already ... but wait – this is good stuff! Well, maybe not "good," but at least it's relevant. The esteemed governor of Texas with the big Texas hair (and aspirations of taking his big hair out of Texas) recently signed House Bill 1841 (HB1841) into law, and that law is significant to many of SoftLayer's customers.

Last year, the Texas Comptroller's Office amended a regulation and stated that the use of a server in Texas was adequate to establish a nexus, so an e-commerce vendor who used a Texas web host was required to collect sales tax from their customers even if the vendor had no other presence in the state of Texas. This amendment immediately created issues for web hosts with data centers in Texas: Why would customers get servers from a host in Texas and have to worry about this tax obligation, when they could do business with another host outside of Texas and not have this obligation?

Well, the Comptroller's Office started to realize the effect of this regulation and began to backpedal and say that they didn't really mean what they said.

HB1841 puts the Texas hosting industry back where it was before the Comptroller made those changes: The use of a server located in Texas without any other presence is not considered a substantial nexus for collecting sales taxes. HB1841 specifically states that "A person whose only activity in this state is conducted as a user of Internet hosting is not engaged in business in this state." Note: You may be wondering if this bill applies to Amazon in Texas, but HB1841 doesn't cover Amazon because they had a physical presence in Texas (albeit one operating under a different affiliate with a different name), requiring them to pay sales taxes.

Our very own Brenk Johnson was involved in the effort to pass HB1841. He attended a couple of committee hearings, and he'll tell you his mere presence got this out of committee and in front of our governor. He is quoted as saying, "I can sit in a meeting with the best of them."

At the risk of making this blog sound like an Academy Awards reception speech, we would like to thank Jeff Clark and the crew over at TechAmerica for helping to get this bill passed. TechAmerica is a technology advocacy group that we recently joined, and they have a cracker-jack lobby group. Our CFO and I were on the verge of hiring a lobbyist for the 2009 Texas session, but we ended up not doing so. Two years later, we decided to go with this industry group, and the verdict is that TechAmerica has been a great investment ... It was also through this group that Lance became a Cloud Commissioner! We also want to thank our competitors over at RackSpace, especially their General Counsel Alan Schoenbaum, for getting us involved and for leading and spearheading the passage of this bill ... What was good for the goose was good for the gander on this one.

Because we are back to where we were a couple of years ago in the definition of nexus with relationship to hosts with data centers in Texas, this was not really a game-changing bill. It was important to clarify and undo the damage caused by the waffling that occurred in the State's Comptroller's Office, so in that sense this was a good bill for the industry. Next session we're going to aim for the game-changer: Margin taxes!

-@badvizsla

April 22, 2008

Buying a House vs. Buying a Server

Thinking of buying a house – don’t. I have been through the 7 layers of candy cane to get into the one I just bought. Not only did I have to search to find the right Real Estate Agent that fit my needs and my busy schedule, I had to search around for the right house, in the right location for the right price – sound familiar?

After all of that I finally found the perfect place, got my funds in order, and then I had to sign the rights away to my first and third born sons. Never in my life (or whole life for that matter) have I had to sign and initial my name to so many documents at once.

Yay, I’ve got the house, now I get to furnish it so I can actually live there. More. Fun. Now I’m out there shopping around for furniture, kitchen appliances, bedroom furniture, bathroom things and all that other good stuff.

I’m completely exhausted from all of the above and work on top of that. I now see where y'all (I’m from Texas, cut me some slack) are coming from when shopping around for a server. I miss my lease. The whole process was simple, efficient and for all encompassing purposes much much easier. Sure, a house traditionally appreciates in value with time and a server in all likely purposes depreciates with time and there is a difference between the two, however I did want to compare these two markets in my cool little blog here.

Leasing a server is a lot like leasing a house or apartment, of which after this whole ordeal I do very much miss. In a server and house lease you are not liable for any maintenance on either. We at Softlayer will take care of all of that for you, and the landlord takes care of the house/apartment if anything breaks. If something comes up then you can get out of the lease quite easily as well as the cost is 3-5 times less than actually buying outright. Leasing also takes less time. You can get into a lease in just a couple of days on a house/apartment or a server for that matter in just a couple of hours. Buying a house takes months of preparation, searching, getting funds in order, signing and moving in. On the other hand, buying a server can take days, weeks, and months even depending on your setup, co-location facility and how fast you can get it into a live production setting. There are literally a million different variables that go into both of these equations for time, but this is just generally speaking. I’m sure there are many of you out there that can buy both in a matter of minutes and have everything setup and running just as fast.

In the long run my house will in all probability appreciate in value so it will be worth it – aside from the hassles and giving up my first and third born sons. However buying a server and co-locating it somewhere for years will likely depreciate with value as technology changes so rapidly in this day in age. Likely your old servers will not work as efficiently as new technology comes out and will eventually become obsolete. In the housing market my house will be around and habitable so to speak (depending on how rough I treat her) for decades to come. However as I pointed out earlier they are very different markets but the lease/buy theory is still the same.

To sum it all up – don’t buy, lease, you’ll thank me later.

-Michael

Categories: 
Subscribe to house