N.J. Admin. Code § 18:24-25.6

Current through Register Vol. 56, No. 21, November 4, 2024

Section 18:24-25.6 - Treatment of computer software-related services

(a) Since prewritten computer software is defined as tangible personal property under the Sales and Use Tax Act, servicing, installing, or maintaining computer software is subject to tax pursuant to 54:32B-3(b)(2), whether the computer software is serviced, installed, or maintained at the purchaser's location or from or at a seller or service provider's remote location.

Example: Upon purchase of prewritten computer software, and for a separate additional cost, a technician goes to a customer's business location to download (install) computer software to the business's server. The charge for this installation service is subject to sales tax.

(b) Modifying prewritten computer software for a purchaser is treated as a sale of non-enumerated services and is not subject to sales tax.

Example: A computer technician creates a string of code to "bridge" two computer software platforms already in place at the location of the business customer. This requires the entry of computer code programming. The charge for modifying the existing computer software is not subject to sales tax.

(c) Customer support services are treated as a sale of a non-enumerated service and are not subject to sales tax.

Example: A computer software developer provides customers the opportunity to call a manned hot-line whereby customers who are experiencing issues/problems may receive verbal advice or advice by email about how to resolve their issues/problems. The charge for this service is not subject to sales tax.

(d) Clerical, data entry, or accounting services, etc., which may be performed with the use of computer software are not considered to be servicing computer software. The charge for these services is not subject to sales tax.

Example: An accountant assists one of his business customers by creating an Excel template spreadsheet that may be used as a basis for day-to-day inventory tracking. The charge for this service is clerical or professional in nature. It is not considered the servicing of computer software and is not subject to sales tax.

N.J. Admin. Code § 18:24-25.6

Amended by 46 N.J.R. 2375(a), effective 12/1/2014

Amended by 48 N.J.R. 824(a), effective 5/16/2016