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 120.0560.225

(a) In General

120.0560.225 Software Maintenance Services via Modem. A taxpayer's contract with its customers specifies that taxpayer would perform its software maintenance services, including transmission of program updates, by remote telecommunications means, i.e., by modem. In fact, the taxpayer would not contract with the customer unless the customer had a modem in order to receive software maintenance by telephone. Since the transfer of program updates is by remote telecommunications, there is no transfer of tangible personal property. Therefore, charges for this software maintenance service is not subject to tax. 3/23/95; 4/28/95.