On October 27, the Michigan Court of Appeals affirmed the trial court’s decision in favor of the taxpayer and held that several contracts for data processing services, access to computer programs and databases, and other online services did not include the use of taxable prewritten computer software. After considering the definitions of key statutory terms such as “prewritten computer software,” “computer software,” “delivery” and “use,” the court developed a test to determine when online transactions involving access to computer programs and associated services can be considered taxable prewritten computer software: “if plaintiff exercised control over a set of coded instructions that was conveyed or handed over by any means and was not designed and developed by the author or other creator to the specifications of a specific purchaser.” Applying this test to each of the transactions at issue, the court generally found that accessing and using computer programs via a web browser, or submitting data for analysis to third-party computer programs, did not constitute delivery of prewritten computer software because the plaintiff did not control the software’s code. In those contracts where the vendor provided written materials or the plaintiff had to download computer software onto its computers, the court applied the six-factor “incidental to service” test from Catalina Mktg Sales Corp v. Dep’t of Treasury, 470 Mich. 13 (2004) and found that in each case the tangible personal property was incidental to the service that the plaintiff contracted for. Specifically, the court reasoned, “[t]here is no indication that plaintiff could purchase the software or other tangible personal property independent of the services, and the services gave value to the software and other tangible personal property.” Auto-Owners Ins. Co. v. Dep’t of Treasury, No. 321505 (Mich. Ct. App. Oct. 27, 2015).