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 120.0561

(a) In General

120.0561 Software System—Access by Modem. A taxpayer is engaged in the business of providing computer services and software to school districts. It entered into a licensing agreement which included the following tasks:

(1) Computer hardware review and planning session.

(2) Software installation, training, users manual documentation delivery.

(3) Final acceptance of software system.

The use of the software system will be made available to the school district through a telephone dial-up to the taxpayer's computer.

This is a nontaxable contract for service only and does not call for the transfer of tangible personal property. The school district's use of the program through a modem and the computer files prepared by the taxpayer also constitute nontaxable services. 7/31/87.