Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
120.0000 AUTOMATIC DATA PROCESSING SERVICES AND EQUIPMENT—Regulation 1502
(a) IN GENERAL
120.0114 Installation of Computer System. A company contracts with a customer for the installation of a computer system and an information management system. Specific tasks are:
(1) Installation of some hardware and printers.
Tax does not apply for installing the hardware.
(2) Convert the customer's existing files to the new format.
The charge for converting the existing files to the new format is subject to tax.
(3) Install and test the leased software on the customer's computer and install the customer's converted data files onto the customer's computer.
The charge for these installation functions is not subject to tax.
(4) Train the customer's staff on using the leased software, etc.
Generally, if the charge for training service is optional, the charge is not subject to tax.
(5) Fee covering the cost of the company's staff to travel to the customer's site to perform some of the above functions.
Depending on the taxability of the underlying charge, the charge for travel is taxable or nontaxable. The charge for travel related to nontaxable installation of hardware is nontaxable. The charge for travel related to the reformatting of data is taxable. 8/6/92.