[Hidden-tech] clarification of IT Sales tax

[Tim Boudreau]

It seems like there are a number of ill-defined terms that there isn't a
clear legal test for:

 - "standardized" - what determines that - it implements a standard?  A lot
of people use it?  It comes in shrink-wrap?  It costs more than N dollars?
 Can I write "standardized" software, or is that exclusively software
written by Other People?

 - "open source" - meaning the code has an OSI-approved license?  Or if I
say it is, it is?  If something is both "standardized" and "open source",
which rule applies?

 - "modification, integration, enhancement" - there is a very fuzzy line
here - if I write a piece of software and license it, it sounds like that
is not taxable.  And if I do that and open source it and get paid to create
it, that is not taxable.  But if I then take it and modify it for a
customer, that activity is taxable?  And if that piece of software is one
library I'm using in a project, legally, am I integrating with it
(taxable), modifying it (taxable) or writing custom software which happens
to use it (not taxable)?  On what basis is that decided and who decides it?
 And if I open-source that piece of software, does that make integrating
with it or modifying it non-taxable (it appears so)?

Particularly there are a lot of shades of gray to coding vs. integrating,
since "integrating" usually involves coding (or something that resembles
coding so much you could see it either way), and it's quite normal to be
flipping between the two activities (so accounting for them separately
would be nearly impossible to do with any accuracy).

The legislature has the right to tax - I don't begrudge that - but this
whole thing seems very poorly thought-out.  It's like trying to tax flour,
but only when it's going to be added to premade cake-mix, or if you're
baking bread...but not if you're making gravy or cake from scratch.

Nobody's going to keep this straight, and it's plausible to claim one
activity is really the other (bread = tax-free sugarless cake!).

-Tim

--
http://timboudreau.com
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