[Hidden-tech] FW: Additional guidance from the Department ofRevenue on Computer Software Tax

[Rich Roth]

It's in the latest clarification (Further 
Guidance<http://www.mass.gov/dor/businesses/help-and-resources/legal-library/tirs/tirs-by-years/2013-releases/working-draft-tir-computer-software.html>) 
listed at: http://www.mass.gov/dor/utility/recent-tax-changes.html

Basically what is taxable is modifications to an original that is 
taxable - original not sold and taxed, neither are modifications

R.

On 8/23/2013 9:40 PM, Scott Reed wrote:
>
>
> Thanks for the clarification. Have they updated the FAQ or is that 
> covered in another section?
>
> On 8/23/2013 8:10 PM, Lynn Nichols wrote:
>> I do not agree that a website designer's services in building a 
>> Joomla or Drupal website would be taxable under the new law, at least 
>> according to the new clarification. They are both open source, as is 
>> WordPress. Excel and Access are NOT open source.
>>
>> -- 
>> Lynn Nichols
>> Starstruck Design
>> Gill, MA / 413.863.7752
>> lynn at starstruckdesign.com <mailto:lynn at starstruckdesign.com>
>> http://www.starstruckdesign.com
>> http://www.shopwesternmass.com
>>
>> On Aug 23, 2013, at 7:04 PM, Scott Reed <sreed at avacoda.com 
>> <mailto:sreed at avacoda.com>> wrote:
>>
>>>   ** Be sure to fill out the survey/skills inventory in the member's 
>>> area.
>>>   ** If you did, we all thank you.
>>>
>>>
>>> The following is lifted from the DOR's FAQ:
>>>
>>>     2.  What are modifications to prewritten software that are
>>>     taxable under the new law?
>>>
>>>     A.  Modifications to prewritten software that are subject to tax
>>>     under the new law are modifications to  software which is
>>>     licensed, sold or otherwise made available to more than one
>>>     user, where such prewritten software is modified for the use of
>>>     a specific customer.  The modification may be made either by the
>>>     original seller/licensor of the software or by a third party.
>>>
>>>     For purposes of this tax on modification, integration,
>>>     enhancement, installation or configuration of standardized
>>>     (prewritten) software, prewritten software *does not include*
>>>     proprietary code owned by the provider (seller) of the
>>>     modifications if that proprietary code is not separately
>>>     licensed to customers.
>>>
>>>     Custom application software (including custom software that
>>>     incorporates such proprietary code) that is designed to run on a
>>>     prewritten operating system is /treated as custom software and
>>>     not as a modification of the prewritten operating system software/.
>>>
>>> I interpret the second sentence to say that there is no tax on 
>>> original code as long as the modifications are not licensed to the 
>>> customer (i.e. as long as the customer is paying for the coder's 
>>> time and not for a license to use the coder's product).
>>>
>>> I interpret the third sentence to say that there is no tax on 
>>> original (unlicensed) code that uses prewritten, third party, 
>>> libraries and runs on prewritten OSs.
>>>
>>> This lets those that write code off the hook for the most part and 
>>> it helps clarify that the tax *does apply* to development within 
>>> standalone database frameworks like Excel, Access, Drupal, Joomla, 
>>> etc. where much of the development involves modification to an 
>>> underlying database.
>>>
>>> I wonder, however, if they tax bookkeeping services and, if not, how 
>>> is that different from working within these other database frameworks?
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>
>
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