South Carolina – Taxability of Software and Software Maintenance Contracts

SALT Report 1230 – The South Carolina Department of Revenue has issued a reminder to taxpayers that as of September 1, 2011, with limited exceptions, a warranty or maintenance contract purchased after the initial purchase of tangible personal property is no longer taxable.

However, the sale of a warranty or maintenance contract remains taxable when purchased at the same time as the tangible personal property, unless the property is an exempt purchase.  As a result, Revenue Ruling 03-5, relating to “Software and Software Maintenance Contracts,” has been reinstated for sales of software and software maintenance contracts effective September 1, 2011.

For Further Information:

South Carolina Department of Revenue – Revenue Ruling 11-2