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it's a wacky world
Tuesday, December 30th, 2008 12:43 pmSouth Carolina's laws regarding whether or not sales & use taxes are charged for software and software renewals seem to be wacky. Well-thought out, perhaps, but wacky nevertheless.
This document explains in detail the sales tax rules for software. It all comes down to whether or not a "tangible" item such as a disk or magnetic tape is used.
If the software is transferred via a tangible item, regardless of whether the seller ships the item to the buyer, or whether the seller brings the tangible item to the seller's site and loads it onto the buyer's computer and then takes the tangible item back with them, then the tax applies.
But if the software is downloaded directly over the internet, then the tax does not apply.
Apparently, diskettes, laptops, and magnetic tapes are tangible, but the cabling making up the internet isn't. Isn't that a wacky kind of logic?
5. If software is sold and delivered by a “load and leave” method whereby the seller personally brings the software to the buyer’s location on a laptop computer, connects the laptop with the buyer’s computer with a cable in order to download the software into computer, and then disconnects the computers and takes the laptop with him when he leaves, is the sales transaction subject to the tax?
Yes. The sale of software delivered by a tangible means, the laptop computer, constitutes the sale of tangible personal property subject to the tax.
..
7. Is “canned” software sold and delivered by electronic means via a modem and telephone line from a remote location subject to the sales and use tax?
Software sold and delivered by electronic means via a modem and telephone from a remote location is not subject to the sales and use tax, provided no part of the software, including back-up diskettes and tapes, is delivered by tangible means.
Furthermore, #24 in the document says that if you originally purchased the software on diskette, then if you purchase a renewal via download, the renewal is taxable. But if you originally purchased the software as a download, then the renewal download is *not* taxable.
*WACKITY WACK* ::sspptt::
I wonder what the rules are regarding downloaded music purchases. Going by the above, I'd infer downloaded music isn't subject to tax either.
This document explains in detail the sales tax rules for software. It all comes down to whether or not a "tangible" item such as a disk or magnetic tape is used.
If the software is transferred via a tangible item, regardless of whether the seller ships the item to the buyer, or whether the seller brings the tangible item to the seller's site and loads it onto the buyer's computer and then takes the tangible item back with them, then the tax applies.
But if the software is downloaded directly over the internet, then the tax does not apply.
Apparently, diskettes, laptops, and magnetic tapes are tangible, but the cabling making up the internet isn't. Isn't that a wacky kind of logic?
5. If software is sold and delivered by a “load and leave” method whereby the seller personally brings the software to the buyer’s location on a laptop computer, connects the laptop with the buyer’s computer with a cable in order to download the software into computer, and then disconnects the computers and takes the laptop with him when he leaves, is the sales transaction subject to the tax?
Yes. The sale of software delivered by a tangible means, the laptop computer, constitutes the sale of tangible personal property subject to the tax.
..
7. Is “canned” software sold and delivered by electronic means via a modem and telephone line from a remote location subject to the sales and use tax?
Software sold and delivered by electronic means via a modem and telephone from a remote location is not subject to the sales and use tax, provided no part of the software, including back-up diskettes and tapes, is delivered by tangible means.
Furthermore, #24 in the document says that if you originally purchased the software on diskette, then if you purchase a renewal via download, the renewal is taxable. But if you originally purchased the software as a download, then the renewal download is *not* taxable.
*WACKITY WACK* ::sspptt::
I wonder what the rules are regarding downloaded music purchases. Going by the above, I'd infer downloaded music isn't subject to tax either.
