Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 565.1685


565.1685 Software Maintenance Contracts. Canned software packages can be purchased for resale under the Aerospace Corp. v. SBE (1990) 218 Cal.App.3d 1300 decision even though there are restrictions against transfer in the licensing package, provided the contract that the contractor has with the United States has the appropriate set of title clauses.

When the general principles embodied in the FAR title clauses conflict with specific principles provided in an agency-peculiar procurement supplements to FAR, the agency supplements control. For example, some supplements have provided that, if the software displays a legend, it is subject to the restrictions with respect to passage of title. In these cases, title to the software stays with the contractor (e.g., DFAR 252.227–7013). Thus, in these cases, reference needs to be made to the supplements as well as the FAR clauses in determining whether an appropriate title clause is in effect. 6/13/94; 1/30/96.