Ruling 89-26, Software

This Ruling has been obsoleted by AN 94(10) 

You have inquired as to the taxability of software maintenance agreements, custom software and installation charges.

Custom software is tangible personal property and is therefore subject to the sales tax pursuant to section 12-407(2)(a) of the Connecticut General Statutes. The maintenance agreement with respect to the software is a taxable sale pursuant to section 12-407(2)(c) of the Connecticut General Statutes which taxes the producing, fabricating, processing, printing or imprinting of tangible personal property for a consideration for consumers who furnish the materials used in such activity, including but not limited to, computer programming. The installation charges would be taxable as part of the sale of the tangible personal property under section 12-407(2)(a) of the Connecticut General Statutes and section 12-426-25(c) of the Regulations of Connecticut State Agencies.

LEGAL DIVISION

July 12, 1989