Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2015
Sales and Use Tax Annotations
120.0000 AUTOMATIC DATA PROCESSING SERVICES AND EQUIPMENT—Regulation 1502
(c) CUSTOM PROGRAMS
120.3090 Custom Programs. A specially developed version of a prewritten computer program made to function for the first time on a computer's basic operational system is a custom program if the prewritten program version will not function on that operational system. This is the case even though the prewritten versions may have varying degrees of source and object code similarity with the developed version. The reservations by the developer in the license agreement (pursuant to which the specially developed software is transferred) of the right to relicense and deliver that developed version to another customer will not affect it being a custom program.
The delivery of any modifications, enhancements, or upgrades to the specially developed version of the program for a first-time transferee will qualify as modifications of a custom program or a custom program if the prewritten modifications, enhancements, or upgrades will not function on the first-time transferee's computer system. 1/21/88.