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 120.0108.350

(a) In General

120.0108.350 Free Program Updates. A taxpayer purchases a prewritten computer program. Royalties are paid to the vendor depending upon the amount of use of the program. The program is updated periodically at no additional cost. The updates are made over telephone lines. The providing of updates by telephone lines is regarded as a service related to the sale of the original program. Tax applies to the entire royalty charge. 6/5/81.