States are discovering that the mass transition to the cloud -- and the e-commerce that has accompanied it -- are diverting millions of dollars in tax revenue into the limbo of cyberspace. A handful of states have sought to rectify the issue, but analysts say a new ruling in Utah could represent a paradigm shift in the way taxes are levied on Internet-based services elsewhere. In February, the state ruled that all fee-based Web services are subject to sales tax, regardless of whether the software was downloaded or accessed via a cloud.

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