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

[Bruce Hooke]

Keep in mind that packaged software has been taxable all along, so nothing
has changed there. What has changed is that "modifications" to such software
are now taxable. So, Office and Windows have been taxable all along.

Bruce 

-----Original Message-----
From: hidden-discuss-bounces at lists.hidden-tech.net
[mailto:hidden-discuss-bounces at lists.hidden-tech.net] On Behalf Of Robert
Heller
Sent: Saturday, August 24, 2013 9:46 AM
To: Scott Reed
Cc: hidden-discuss
Subject: Re: [Hidden-tech] FW: Additional guidance from the
DepartmentofRevenue on Computer Software Tax

   ** Be sure to fill out the survey/skills inventory in the member's area.
   ** If you did, we all thank you.


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:

> 
> MIME-Version: 1.0
> 
>    ** 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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