Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations

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120.0000 Automatic Data Processing Services and Equipment—Regulation 1502

Annotation 120.0014

(a) In General

120.0014 Charges for Code to Access Information on CD. A taxpayer creates a database of technical information on CD. The CD is then marketed through distributors and directly to consumers. The CD contains information covering several different applications. Usually, limited access to the data on the CD is sold to consumers by the distributors, but the consumer must contact the taxpayer to obtain a code to access that information. When the consumer contacts the taxpayer to obtain the access code, the consumer is told of additional information on the CD that is available for an additional charge. If the customer agrees to pay this fee, the taxpayer provides no tangible personal property, but rather provides only access codes that will unlock the additional information on the CD that would otherwise be inaccessible to the customer.

The taxpayer owes sales tax on its charge to the consumer for access to the additional information on the CD whether the charge is made to a customer who purchased the CD directly from the taxpayer or to a customer who purchased the CD from a distributor. 9/5/96.