Taxability of Downloaded Software in Massachusetts

The Commonwealth of Massachusetts amended the definition of tangible personal property effective from April 1, 2006. The amended definition includes the transfer of standardized (canned) computer software regardless of its manner of delivery. Applicable regulation, 830 CMR 64H.1.3 explains the application of the Massachusetts sales and use taxes to computer products and software.

The following questions have been addressed in this article:

What is the purpose of the regulation 830 CMR 64H.1.3?
What is the definition of “tangible personal property”?
How is use tax collected and paid in Massachusetts?
What exemptions are provided in Massachusetts for sales of software?
How are sales of reports of standard information treated for tax purposes?

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