New Jersey – NJ Tax Court Clarifies Sales Tax on Software

Reed Smith – 1/12/2017

by David Gutowski, Matthew Setzer, Robert Weyman

“The New Jersey Tax Court recently issued a decision concluding that pre-written software sold on tangible media was tangible personal property for New Jersey sales tax purposes. Notwithstanding this decision, most business purchases of software and related services are not subject to New Jersey sales tax.

On January 9, 2017, the New Jersey Tax Court reversed its prior decision in Premier Netcomm Solutions, L.L.C. and concluded that pre-written software sold on tangible media is treated as tangible personal property for sales and use tax purposes.1 Because it specifically addresses only transactions occurring before October 2005, the court’s decision will have limited relevance for most taxpayers. Still, the decision serves as an important reminder that most business purchases of software and related services are not taxable in New Jersey”….

For further information:

http://www.jdsupra.com/legalnews/new-jersey-tax-court-clarifies-sales-61756/