Software Related Transactions

Determining whether to collect sales tax on software licenses involves a great deal of tax complexity, especially for taxpayers with multistate operations. Sales tax laws vary from state to state and change frequently. If you’re not careful, you’ll wind up making a costly software taxing mistake. Let TaxMatrix help you determine the taxability on the software used by your corporation!

 

You’ll appreciate the tools we have to ensure your tax policies are always on track. Stop guessing at whether you have to charge sales tax for your next download, and learn the right way to manage your business today.

At the request of our loyal clients, we’ve developed a comprehensive software taxability matrix to help your team make quick and accurate decisions. Prevent the fines associated with improper taxing and safeguard the security and reputation of your business. You’ll be surprised at how easy we make it! Our custom taxability matrix is updated as changes occur, to keep you in the loop of the taxability of your software. It covers the following categories and nuances:

Canned Software

  •  Tangible Delivery
  •  Electronic Delivery
  •  Load and Leave
  •  Software Licenses

Custom Software

  •  Tangible Delivery
  •  Electronic Delivery
  •  Load and Leave
  •  Software Licenses

Maintenance Agreements

  •  Mandatory
  •  Optional

Cloud Computing |
Software as a Service |
Computer Services

  •  Taxable Services
  •  Non-Taxable Services

TaxMatrix Protects You From Misconceptions

Too many online retailers and service providers believe sales and use taxes doesn’t apply to intangible products. This isn’t always the case. Is software taxable? The answer depends on the program, as well as how it is sold and who is buying it. How customized is the program? Is it bundled with other programs and services? How are they put to use?

Are software licenses taxable? Again, the answer isn’t a simple yes or no. Currently, the New York State Department of Taxation and Finance considers any transfer of license a taxable sale, including the use of SaaS. Other states disagree, and the Permanent Internet Tax Freedom Act (PIFTA) may create a conflict.

Our software taxability matrix saves you the most time and frustration by making the answers to these questions easy. Provide your customers with top-quality products and protect your assets by following tax law to a T, with help from TaxMatrix.

Destination of Taxation

Both buyers and sellers of software related goods and services have a lot at stake. Buyers need to be aware of the ever changing sales and use tax laws pertinent to software related transactions to avoid overpaying or under-accruing.  Sellers of software related product must properly register, collect and remit sales tax to avoid facing penalties and interest. Whether you overpay or underpay, the results can be costly.

By leveraging our easy-to-use matrix, you and your accounts payable team can mitigate errors across your entire footprint for SOFTWARE RELATED TRANSACTIONS.  Lastly, you and your team can lean on us for ongoing compliance support for any spend category in any state through our Tax Help DeskSM at no charge.

To obtain a copy of this custom taxability matrix or to become a subscriber, please contact our Tax Help DeskSM at help@taxmatrix.com or fill out the form here.

Learn more about our Custom Taxability Matrices.