Transaction of Computer Software--is it Taxable?

Classification of software is a vital issue for taxation purpose. The issue generally arises when it becomes difficult to determine whether the software to be taxed is either a tangible property or intangible property. Transaction of canned software is taxed by almost every US states. Canned software (“bundled”) is generally treated for sales tax purposes as a sale of tangible property.

The following questions have been addressed in this article:

How is canned software taxed?
Which software is exempted from taxation?

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