Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501
(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE
515.0019.700 Transfer of Real Estate Information on Disks. A taxpayer is in the business of providing commercial real estate information to its customers through a license agreement. The taxpayer maintains a database of commercial real estate information for certain geographic regions which is updated daily. The taxpayer compiles this information on computer disks and CD ROMs which it provides to customers on a temporary basis.
Where a transaction involves the delivery of tangible property which includes information generated from a pre-existing database, the transaction is a sale or a lease of tangible personal property and is subject to tax unless an exemption otherwise applies. Since the taxpayer is providing its numerous customers with noncustomized information on computer disk and CD ROM at a standardized price, the true object sought by the taxpayer's customers is regarded to be the disks and CD ROMs for the information contained in those items and not the providing of a service by the taxpayer. Therefore, the taxpayer is leasing disks and CD ROMs to its customers which are not in substantially the same form as acquired. The taxpayer must collect tax on the rentals payable for its disks and CD ROMs and remit these amounts to the Board. 10/8/96.