Laws, Regulations and Annotations


Business Taxes Law Guide – Revision 2023

Sales and Use Tax Annotations

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120.0000 Automatic Data Processing Services and Equipment—Regulation 1502

Annotation 120.0100

(a) In General

120.0100 Computer Work. When a computer center enters a contract which provides that the center will keypunch data from source documents received from a client, verify the data, correct it, feed the material into a computer, and produce reports therefrom, the charges are not subject to tax because the contract is a service contract. However, where a computer service center enters into a contract solely to keypunch or keypunch and verify the data, the charges are taxable since they constitute charges for fabrication and the sale of tangible personal property. Similarly, charges for solely reproducing punched cards, print outs in the form of printed labels or multiple copies of reports are taxable. 3/20/68.