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 120.0930

(a) IN GENERAL

120.0930 Interactive Presentations. Interactive corporate training and sales presentations which are delivered to customers on computer disks or CD ROMs and run on automatic data processing equipment qualify as computer programs. If the interactive presentation is completely designed for a particular customer (custom program) rather than a modified prewritten program, the sale would not be taxable. If an existing program is modified, sales or use tax applies to the charge for the presentation. However, tax does not apply to separately stated charge for modification made to the program for the customer. On the other hand, if a separate charge is not made for modifying an existing program, tax applies to the entire charge made to the customer unless the modification is so significant that the new program qualifies as a custom program based on the following criteria:

(1) If the prewritten program was previously marketed, the new program will qualify as a custom program if the price of the prewritten program is 50 percent or less of the price of the new program.

(2) If the prewritten program was not previously marketed, the new program will qualify as a custom program if the charge made to the customer for the custom modifications is more than 50 percent of the contract price to the customer. (Regulation 1502(f)(2)(B).) 6/20/95.