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 120.0372

(a) In General

120.0372 Out-of-State Use of Programs. A taxpayer has computer centers in California and in other states. It purchases prewritten programs. Royalties are paid to the vendors depending upon the total use made of the programs. In some cases, the purchased programs are copied and the copies are sent to the out-of-state centers. In other cases, the original tape is sent to the out-of-state centers by the taxpayer. Tax applies to the entire royalty charge because there was a completed taxable sale in California. It is immaterial that there is a use outside the state. 6/5/81.