Always break out installation, support, and training charges from the software license fee to preserve exemptions.
When a transaction includes both taxable software and exempt services, Michigan uses this test to determine if the primary "object" of the sale is a service or a product. If the software is merely incidental to a professional service, the whole transaction may be exempt. Compliance Tips To protect against audit risks, businesses should:
If a maintenance agreement is required as part of the purchase of taxable prewritten software and includes future updates or enhancements, the entire cost is generally taxable . Optional Agreements:
Are you currently reviewing a or trying to determine if a specific SaaS product with a desktop agent is taxable?
In Michigan , the taxability of software maintenance agreements depends heavily on whether the contract is or optional , and the nature of the software it supports. Key Taxability Rules for Maintenance
Maintenance contracts for custom software (designed for a specific user's needs) are generally considered non-taxable services. Critical Factors and Exemptions
We use cookies to improve your experience. By continuing to use our site, you accept our Cookies, Privacy Policy,Terms and Conditions. Close X
