California – BOE Holds Meeting to Discuss the Assessment of Embedded Software

SALT Report 1139 – The California BOE will meet to discuss the problems with the assessment of embedded software and the possible solutions.

The California Board of Equalization will hold a meeting to discuss the assessment of embedded software and computer software in stand-alone, multi-purpose machines commonly used at home and for those used in a business setting.

Issue at hand:

When a computer or other item of equipment is bundled together with pre-installed software purchased for a single price, Rule 152 allows the county assessor to value the taxable tangible property at its purchase price.  Currently, rule 152 presumes that the purchase price for equipment that includes embedded software is the value of that equipment for tax purposes.

Under the rule this presumption may be rebutted contingent upon certain facts.  Specifically, if the taxpayer can “supply sale prices, costs or other information that will enable the assessor to make an informed judgment concerning the  proper  value to be ascribed to taxable and nontaxable components of the [purchase] contract.”

Consequently, the rule burdens the taxpayer with the job of providing the county assessor with data regarding the value of any nontaxable software.

If you would like to attend the meeting:

October 19, 2011 at 10:00 a.m.

State Capitol Building

10th & L Streets, Room 4203, Sacramento, CA

Or, view the webcast

For Further Information:

BOE’s Meeting and Agenda Schedule

BOE’s Assessment of Embedded Software