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This Ruling has been obsoleted in part by AN 94(10)

Ruling 89-163


You have inquired as to the sales and use tax consequences of the development of software to run equipment. X Company is an engineering and manufacturing company that contracts with independent engineering contractors to develop software to run its equipment. Software discs are the final product received from the engineer. The discs are resold as part of the equipment which cannot operate without them.

The sale of software discs is subject to the sales and use tax under the definition of "sale" and "selling" pursuant to Conn. Gen. Stat. ยง12-407(2)(c). X Company may purchase the software discs on a resale certificate as long as the following two conditions are met:

1. X Company sells the software discs without change or modification; and

2. X Company retains no proprietary right to the software discs.


October 27, 1989