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 120.0115.700

(a) In General

120.0115.700 Lease of Database. A database system includes application software which has been licensed to the provider of the database. The database provider delivers a diskette to its customer. It cannot sell the system because it does not own the system. The subscriber manipulates the data to obtain information which he desires. The subscriber receives weekly updates of the data base.

The provider of the database is the retailer of the database system if the subscriber is not required to return the diskette. If the subscriber is required to return the diskette, the transaction is a lease. Since the property is not leased in substantially the same form as acquired, the lease receipts are subject to tax. 6/7/91.