Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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A

120.0000 AUTOMATIC DATA PROCESSING SERVICES AND EQUIPMENT—Regulation 1502

Annotation 120.0365

(a) IN GENERAL

120.0365 Optional Software Maintenance Contract. Tax applies to charges for optional software maintenance contracts if it is contemplated that during the terms of the contracts customers will receive revised or updated versions of the prewritten programs on tangible storage media if there is a problem identified with the programs. The transfers of updates or revisions are not incidental to the provision of support services, even if the revisions or updates are rare. 3/23/88. (Am. 2003–2). (Am. 2004–2).

(Note: Regulation 1502 was amended so that beginning January 1, 2003, 50 percent of the charge for optional software maintenance agreements is subject to tax. Prior to that date, generally 100 percent of the charge was subject to tax.)