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 120.0116

(a) In General

120.0116 License and Royalty Fees. If a transaction involves the transfer of software but the purpose of the transfer is to grant the transferee the right to copy and sell software under circumstances that such copying and selling would otherwise be a violation of the transferor's federally protected copyright interests, the transfer is not subject to tax. Tax does not apply whether the transferee sells the program in the form in which it is received, modifies it and sells the modified program, or incorporates it into another program and sells that program. 11/17/94.