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 120.0540

(a) In General

120.0540 Software License Transfer Fee. A customer has been using software, purchased from the taxpayer, for several years. This customer paid sales tax reimbursement on the original software license when first purchased. The software is licensed to be used on only one computer system. The customer recently upgraded its computer hardware to new equipment. The taxpayer charged the customer a software license transfer fee to allow it to move the software to the new equipment.

The software license transfer fee charged to the customer to permit that customer to utilize the software on new computer equipment relates to the original sale of the software. Since the original sale was taxable, the additional fee is also taxable. 7/18/95.