Sales Tax Articles
Sales Tax State Activity Update - October 2006
Sunshine State Sets Sights on Software Services
Facts
The taxpayer entered into a Master Software License Agreement with a vendor for the license to use software and for technical services from the vendor, which included software installation, integration assistance and user training.
The taxpayer also entered into an agreement to purchase hardware from the vendor on the same date.
Over a two year period additional technical services were provided by the software vendor and billed to the taxpayer. A statement of work provided the scope of the services and an hourly rate. It also held the taxpayer responsible for the project management. All payments for the technical services were approved by the taxpayer.
Response
In a Technical Assistance Advisement(TAA) the Florida Deparment of Revenue(FDR) concluded that the additional technical services are inextricably intertwined with the license to use software. The FDR referred to the pertinent parts of Section 212.02, F.S., namely,
- (15) "Sale" means and includes:
(a) Any transfer of title or possession, or both, exchange, barter, license, lease, or rental, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration. - (16) "Sales price" means the total amount paid for tangible personal property, including any services that are a part of the sale....
Other statutes, rules and court cases were also cited in support of the FDR's response.
View the full text of this TAA on the Florida Department of Revenue Website.
Florida Dept. of Revenue, TAA, No. 06A-021, 07/26/2006)
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