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

[Kelly Albrecht]

I would think so to some extent, but more so it will give open source additional advantages when a consultant is deciding a solution path to recommend.  This latest development is music to my ears :)

On Aug 24, 2013, at 9:46 AM, Robert Heller <heller at deepsoft.com> wrote:

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> 
> Wondering aloud: I wonder to what extent there will be presure for people to 
> move away from (taxable) closed source to (non-taxable) open source solutions? 
> Eg will the total 'cost of ownership' of MS-Windows / MS-Office go up enough 
> to make the open source alternitives more attractive financially?
> 
> At Fri, 23 Aug 2013 21:40:31 -0400 Scott Reed <sreed at avacoda.com> wrote:
> 
>> 
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>>   ** Be sure to fill out the survey/skills inventory in the member's area.
>>   ** If you did, we all thank you.
>> 
>> 
>> 
>> 
>> 
>> 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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> -- 
> Robert Heller             -- 978-544-6933 / heller at deepsoft.com
> Deepwoods Software        -- http://www.deepsoft.com/
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