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 120.0015

(a) In General

120.0015 Charges Related to Both Installation and Hardware. The taxpayer sells computer hardware and software, and charges for related services such as hotline support, miscellaneous supplies, repair parts, employee travel expenses for site preparation and installation of hardware and software.

Sales tax applies to the retail sales of hardware, miscellaneous supplies, repair parts, and pre-written and sub-licensed software. Sales tax also applies if the client is required to purchase a maintenance contract or the hotline support service. Separately stated travel and subsistence expenses should be allocated between the taxable charges for site preparation and the exempt charges for installation of hardware and software. Charges for testing a pre-written program on the client's computer is part of the installation of the program and are exempt. 6/9/89.