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 120.0455

(a) IN GENERAL

120.0455 Reprogramming Activity Conducted on Customer's Computer. In reprogramming, updating, or error correcting, a taxpayer's employees take a floppy disk to the place of business of the customer, insert the disk in a disk drive, and copy the program into the memory of the customer's computer by operating the computer. The taxpayer's employees then remove the disk and return with the disk to the taxpayer's place of business.

The charges for reprogramming activity conducted in this manner are not subject to the sales tax. There is no title transfer transaction and there is no lease transaction. Also, the reprogramming of a programmable piece of equipment does not constitute fabrication or processing of the equipment. Rather, the charges made for reprogramming are charges for the performance of a service, not for sale of tangible personal property. 3/23/95.