Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660
(a) IN GENERAL
330.2103 Computerized Dictation/Transcription Systems. A taxpayer sells and leases computerized dictation/transcription systems. The heart of the system is a computer which the taxpayer purchases from an outside vendor and a proprietary software package added by the taxpayer to perform the transcription function. The computer and software are then sold or leased to the customer for a package price.
When the system is sold to the customer, the entire sale price would be subject to tax. When the system is leased to the customer, the lease receipts would be subject to tax if the system (in particular, the software components) is not leased in substantially the same form as it was acquired by the taxpayer. Since the software is proprietary software media, tapes, drums, discs, manuals, etc., it is assumed that the software is not leased in the same form as acquired. That is, the lessor generally would duplicate the proprietary software on blank storage media. 7/15/81.