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Missouri Issued a Private Letter Ruling regarding the taxability of canned Software, sales and use tax, and software licenses.

Missouri Issues Private Letter Ruling Regarding Taxability of Software

On August 21, 2015, the Missouri Director of Revenue issued Private Letter Ruling LR 7615 regarding the taxability of canned software, custom software, software licenses, and maintenance agreements.  The ruling states the following:

  1. Canned software programs delivered electronically are not subject to sales and use tax;
  2. Customized software programs delivered in tangible format or electronically through the internet are not subject to sales and use tax;
  3. Licenses to use canned software of which delivery of the original software occurs electronically through the internet to the purchasers’ servers and is subsequently downloaded and copied is not subject to sales or use tax;
  4. Mandatory and optional software maintenance/support delivered electronically through the internet and remotely by phone are not subject to sales and use tax as long as the delivery of the initial software was done electronically
  5. Optional maintenance/support that is delivered electronically for canned software that is delivered in a tangible form of which the vendor separately states each item on the invoice or separately invoiced is not subject to sales and use tax;
  6. Additional licenses related to canned, tangible software are subject to sales tax;
  7. Purchases of software programs installed by the vendor at the purchasers’ location in Missouri using a tangible storage media are not subject to sales and use tax as long as it is on the “load and leave” basis and the tangible software is taken away by the vendor.
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