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 120.0800

(a) In General

120.0800 Use of Purchased Software Program as Manufacturing Aid. Taxpayer creates custom computer programs which are written to the special order of the customer. On some customers' contracts, taxpayer will utilize a purchased software program as a tool to help produce the finished custom program.

Tax does not apply to a custom computer program. However, use of a purchased software program as a manufacturing aid to produce the custom program is a taxable use and tax applies to the purchase of the software by taxpayer.

Charges for additional copies of the custom program and charges for design and production of disc labels, disc sleeves and disc packaging are subject to tax. 11/13/91.