Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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S

515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501

Annotation 515.0012.885

(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE

515.0012.885 Price Updates. A company in the business of retailing computer hardware, software, and related supplies also sells computer software to various pharmacies. The basic software program is intended to provide a basic operating system for the computer and, at the same time, contains drug prices on the most common drugs and drug products used by pharmacists. Contained within the basic software program are several specific files including a drug price file. The drug price file contains a listing of over 7,000 individual drugs and drug products, and their corresponding prices. The price update feature, which is sold for a flat fee per month, entitles purchasers of the basic program to receive price updates on those prescription drugs and drug products on a twice monthly basis. The information is transferred on a diskette according to the customer's special requirements.

The company copies select information onto a computer diskette and delivers the diskette to the customers. The diskette is copied or produced in mass for each distribution. Since the company mass-produces the identical diskette for sale to hundreds of customers, the receipts are taxable as charges for the production, fabrication, or processing of tangible personal property and are not exempt receipts from the provision of services. 4/18/91; 3/27/92.