In a recently published private letter ruling, the Kentucky Department of Revenue concluded that a taxpayer’s service via a Software as a Service (SaaS) model was not a transfer or sale of tangible personal property, and therefore not a taxable transaction. The taxpayer in the ruling charged for access and use of its web-based software, which also included a free downloadable application to enhance the SaaS product. The ruling stated even though the optional application is a pre-written software component, it is offered for free and is a de minimis portion of the offering, and therefore does not convert the SaaS product into a taxable bundled transaction.