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The Michigan Department of Treasury issued a Notice announcing that it will no longer impose sales or use tax on certain prewritten computer software accessed electronically and associated online services. The Notice comes on the heels of the Michigan Court of Appeals decision in Auto-Owners Insurance Company v. Department of Treasury and the Michigan Supreme …

By Nick Kump and Charlie Kearns

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…

By Nick Kump and Charlie Kearns

The Iowa Department of Revenue issued a policy letter declaring that the delivery of a digital software key on a tangible card is exempt from sales tax, as long as the software itself is delivered digitally and there is not a separate charge for the key. Iowa Code section…

In a significant rebuff of the California State Board of Equalization (BOE), the California Second District Court of Appeal held that a manufacturer’s sale of software on tangible media was exempt from sales tax under the technology transfer agreement (TTA) statutes. Lucent Technologies, Inc. v. State Bd. of Equalization, No. B257808, 2015 WL 5862533.

By Mike Kerman and Charlie Kearns

The Indiana Department of Revenue (Department) found that a medical research company that purchased software licenses was entitled to an exemption from use tax for purchases of taxable computer software as long as it could show the licenses were ultimately used outside of Indiana. The Department added that an…

By Robert Merten and Charlie Kearns

The Missouri Department of Revenue has issued a comprehensive letter ruling answering 12 software-related sales tax questions on issues concerning canned software, custom software, software licenses, software invoices, software installation and software maintenance agreements. Missouri Department of Revenue LR 7615, Aug. 21, 2015. In the letter ruling, the…

In his State of the State address at the beginning of the year, Texas Governor Greg Abbott tasked the Legislature with enacting meaningful business tax relief. The Legislature responded by reducing the franchise (also called the margin) tax rate and creating new exemptions and incentives for sales tax. At the same time, however, the Legislature…

By Evan M. Hamme and Open Weaver Banks

The New York State Department of Taxation and Finance released an advisory opinion explaining how it will treat drop shipment facilitation services for sales and use tax purposes. The petitioner uses proprietary software to create an Internet-based “hub” through which a web-based merchant orders products from a…