A new ruling from the state of New York clarifies the definition of taxable prewritten software.
If the taxpayer gains constructive possession of the software along with the right to use it, then the transaction is taxable. The ruling is the result of a case involving a New York business that develops software allowing their clients to gain access to form templates.
Since the company sells the right to access these templates electronically and clients complete the templates online to download a digital form, these factors established constructive possession to make the prewritten software taxable.
TSB-A-14(1)S
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