Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
(a) IN GENERAL—DEFINITION
495.0478 Transfers of Computer Programs. Taxpayer A purchases the assets of Taxpayer B. Taxpayer B owns software and technology which is incorporated into its computer programs. The transfer of the software is made by connecting the computer of Taxpayer A to the computer of Taxpayer B at B's place of business in California and transmitting the programs through the connection. Each party retains control of its own computer during this process. After verifying that the programs are successfully transferred, the programs are purged from the seller's computer and the computer which is leased by B is sold to A by the lessor. There is no sale of tangible personal property in the transaction involving the transfer of software from B to A by electronic means. Therefore, no tax is due on that transaction. 6/15/94.