SALT Report 3151 – The California BOE is holding a public hearing to address the proposed amendments to Regulation 1502 (Computers, Programs and Data Processing). Details of the hearing are as follows:
Location – 450 N. Street, Sacramento, California
Date – December 17-19, 2013
Time – 9:30 AM
At the hearing the, any interested person may present or submit oral or written statements regarding the adoption of the proposed amendments. In summary the proposed amendments intend to allow for backup copies to be provided without tainting the taxability of the software, as specified.
In pertinent part, “The proposed amendments to Regulation 1502, subdivision (f)(1)(C) clarify that a maintenance contract sold in connection with the sale or lease of a prewritten program, including an optional maintenance contract subject to tax at 50 percent of the lump-sum charge, may provide that the purchaser is entitled to receive a backup copy of the same or similar prewritten program recorded on tangible storage media, so that the purchaser may use the backup copy to restore the prewritten program. The proposed amendments to Regulation 1502, subdivision (f)(1)(D) clarify that subdivision (f)(1)(C)’s provisions regarding the taxation of optional maintenance contracts apply to optional maintenance contracts sold in connection with nontaxable electronic download and load-and-leave transactions described in subdivision (f)(1)(D).”
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