Senate Bill (S)

Authored by

DIGEST

Sales tax on software. Provides that for purposes of the sales tax, a person is a retail merchant making a retail transaction when the person grants a user the right to use prewritten computer software delivered electronically. Specifies, however, that a transaction in which a user is granted the right to remotely access prewritten computer software: (1) is not considered to be a transaction in which prewritten computer software is delivered electronically; and (2) does not constitute a retail transaction (and is therefore not subject to sales tax); unless the prewritten computer software is also available in a substantially similar Sales tax on software. Provides that for purposes of the sales tax, a person is a retail merchant making a retail transaction when the person grants a user the right to use prewritten computer software delivered electronically. Specifies, however, that a transaction in which a user is granted the right to remotely access prewritten computer software: (1) is not considered to be a transaction in which prewritten computer software is delivered electronically; and (2) does not constitute a retail transaction (and is therefore not subject to sales tax); unless the prewritten computer software is also available in a substantially similar form to be purchased, rented, or leased in a physical medium or delivered electronically. Provides that if the transaction is for prewritten computer software that is both: (1) remotely accessed; and (2) electronically delivered or delivered by means of a tangible medium; the transaction is not considered a retail transaction if the transaction includes a service, the service is the true object of the transaction, the prewritten computer software is essential to the use or provision of the service, and the prewritten computer software is provided exclusively in connection with the service. ... View more