The document provides responses to frequently asked questions about Massachusetts' new sales and use tax applicable to computer system design services and modification of prewritten software. Key points addressed include:
- Prewritten software and modifications to prewritten software are taxable. Custom software remains exempt.
- Licensing of software is treated as a sale for tax purposes.
- The new tax takes effect on July 31, 2013 and applies to certain computer and software-related services on or after that date.
- Technical support, training, and troubleshooting services are generally not taxable unless additional taxable software is provided.
Rob Coneybeer (full length) - Why Dungeons and Dragons (not science fiction) ...Startupfest
Startupfest 2014 - "As the Internet of Things becomes the Internet of Everything, we're entering a world where every object becomes an enchanted object. With the advent of essentially free computation, memory, and wireless technology, Internet connectivity will be woven into everything valuable enough to be bought, sold, or stolen. People who write code are the sorcerers of tomorrow.
Humanity’s future as a spacefaring species isn’t going to happen anytime soon. Fundamental physical constraints are held back by advances in energy technology that increase at only 3-5% per year, versus the 18-month doubling in electronics due to Moore’s Law. Together with advances in biotechnology, and virtual reality headsets that (literally) make your head spin, our future technology of the next 100 years is going to follow a virtual and literal path of Dungeons and Dragons, not spaceflight.
A world of enchanted objects is already arriving – thermostats that program themselves, phones that retrieve and display information based on voice commands, cars and planes that drive themselves – all of these things impact every part of our lives. As an experienced early stage investor in successful Internet of Things companies like Nest and Mocana, Rob plans to share his views about what’s highly predictable about this trend, and how entrepreneurs can capitalize on it."
Startupfest 2012 - Do your customers give a crap?Startupfest
Entrepreneurs are great at lying to themselves. They can rationalize anything to preserve their most treasured beliefs, right up until the moment they hit the wall at a million miles an hour. There’s only one thing that really matters: do your customers care? If they do, they’ll help you grow and even act as a safety net when you make mistakes. If they don’t, you’re wasting everyone’s time and money. In this blunt, and perhaps uncomfortable, session, Jamie Siminoff shows how to know for sure if your customers give a crap.
Proposed R&D Credit Regulations Would Clarify, Modify Tests for Internal Use ...CBIZ, Inc.
The Treasury and IRS have released proposed regulations governing the credit for increasing
research activities (the research and development or R&D credit) with respect to computer
software for internal use. The proposal also withdraws a prior advanced notice of proposed
rulemaking, and asks for public comments.
This is the chapter I wrote for Professor William Byrnes' Taxation of Intellectual Property and Technology treatise. I am truly grateful for this experience and I am honored to have participated in this project.
Rob Coneybeer (full length) - Why Dungeons and Dragons (not science fiction) ...Startupfest
Startupfest 2014 - "As the Internet of Things becomes the Internet of Everything, we're entering a world where every object becomes an enchanted object. With the advent of essentially free computation, memory, and wireless technology, Internet connectivity will be woven into everything valuable enough to be bought, sold, or stolen. People who write code are the sorcerers of tomorrow.
Humanity’s future as a spacefaring species isn’t going to happen anytime soon. Fundamental physical constraints are held back by advances in energy technology that increase at only 3-5% per year, versus the 18-month doubling in electronics due to Moore’s Law. Together with advances in biotechnology, and virtual reality headsets that (literally) make your head spin, our future technology of the next 100 years is going to follow a virtual and literal path of Dungeons and Dragons, not spaceflight.
A world of enchanted objects is already arriving – thermostats that program themselves, phones that retrieve and display information based on voice commands, cars and planes that drive themselves – all of these things impact every part of our lives. As an experienced early stage investor in successful Internet of Things companies like Nest and Mocana, Rob plans to share his views about what’s highly predictable about this trend, and how entrepreneurs can capitalize on it."
Startupfest 2012 - Do your customers give a crap?Startupfest
Entrepreneurs are great at lying to themselves. They can rationalize anything to preserve their most treasured beliefs, right up until the moment they hit the wall at a million miles an hour. There’s only one thing that really matters: do your customers care? If they do, they’ll help you grow and even act as a safety net when you make mistakes. If they don’t, you’re wasting everyone’s time and money. In this blunt, and perhaps uncomfortable, session, Jamie Siminoff shows how to know for sure if your customers give a crap.
Proposed R&D Credit Regulations Would Clarify, Modify Tests for Internal Use ...CBIZ, Inc.
The Treasury and IRS have released proposed regulations governing the credit for increasing
research activities (the research and development or R&D credit) with respect to computer
software for internal use. The proposal also withdraws a prior advanced notice of proposed
rulemaking, and asks for public comments.
This is the chapter I wrote for Professor William Byrnes' Taxation of Intellectual Property and Technology treatise. I am truly grateful for this experience and I am honored to have participated in this project.
Do you want to become an businessman and have an idea of running an app or software and looking for software developer to help you to build the brick of your dreams then trust us in today’s time, engaging a software developer is seems like a cakewalk, if only, considered in broader concept, however the reality is far different where the cakewalk may turn into walking alongside dinosaurs as in a Jurassic park, where any time situations overturn leading into a grave uncertainty.
well-executed contract is the need of an hour to get the complete control and ownership over the software, else, might be possible you will find yourself in a situation where you have spent lots of money on development of software and got nothing in return.
Tough, there can’t be “One Size Fits All” kind of contract for software/ app development, but in this Article, we would emphasize our focus area to make Businessman understand the clauses and negotiation points to be discussed while taking services of software developer.
The decision to automate your agency or to change your current Agency Management System is a challenging endeavor—figuring out which one to choose, even more so.
This software package boasts of a seamless integration of income-generating program modules. Data from the offices of Treasury and Assessor are integrated and funneled to the Mayor\'s or Administrator’s Office for better administrative performance and efficient delivery of services.
The frequency of software vendor license audits is skyrocketing. Are you ready? This bulletin discusses why many enterprises are unintentionally out of compliance, and self-audit tactics to help minimize or negate audit penalties.
"The contents of the slide do not constitute any legal advice and is meant only for the purpose of general guidance to the readers, in case of specifc issues please seek appropiate advice".
Enchancing adoption of Open Source Libraries. A case study on Albumentations.AIVladimir Iglovikov, Ph.D.
Presented by Vladimir Iglovikov:
- https://www.linkedin.com/in/iglovikov/
- https://x.com/viglovikov
- https://www.instagram.com/ternaus/
This presentation delves into the journey of Albumentations.ai, a highly successful open-source library for data augmentation.
Created out of a necessity for superior performance in Kaggle competitions, Albumentations has grown to become a widely used tool among data scientists and machine learning practitioners.
This case study covers various aspects, including:
People: The contributors and community that have supported Albumentations.
Metrics: The success indicators such as downloads, daily active users, GitHub stars, and financial contributions.
Challenges: The hurdles in monetizing open-source projects and measuring user engagement.
Development Practices: Best practices for creating, maintaining, and scaling open-source libraries, including code hygiene, CI/CD, and fast iteration.
Community Building: Strategies for making adoption easy, iterating quickly, and fostering a vibrant, engaged community.
Marketing: Both online and offline marketing tactics, focusing on real, impactful interactions and collaborations.
Mental Health: Maintaining balance and not feeling pressured by user demands.
Key insights include the importance of automation, making the adoption process seamless, and leveraging offline interactions for marketing. The presentation also emphasizes the need for continuous small improvements and building a friendly, inclusive community that contributes to the project's growth.
Vladimir Iglovikov brings his extensive experience as a Kaggle Grandmaster, ex-Staff ML Engineer at Lyft, sharing valuable lessons and practical advice for anyone looking to enhance the adoption of their open-source projects.
Explore more about Albumentations and join the community at:
GitHub: https://github.com/albumentations-team/albumentations
Website: https://albumentations.ai/
LinkedIn: https://www.linkedin.com/company/100504475
Twitter: https://x.com/albumentations
Goodbye Windows 11: Make Way for Nitrux Linux 3.5.0!SOFTTECHHUB
As the digital landscape continually evolves, operating systems play a critical role in shaping user experiences and productivity. The launch of Nitrux Linux 3.5.0 marks a significant milestone, offering a robust alternative to traditional systems such as Windows 11. This article delves into the essence of Nitrux Linux 3.5.0, exploring its unique features, advantages, and how it stands as a compelling choice for both casual users and tech enthusiasts.
Do you want to become an businessman and have an idea of running an app or software and looking for software developer to help you to build the brick of your dreams then trust us in today’s time, engaging a software developer is seems like a cakewalk, if only, considered in broader concept, however the reality is far different where the cakewalk may turn into walking alongside dinosaurs as in a Jurassic park, where any time situations overturn leading into a grave uncertainty.
well-executed contract is the need of an hour to get the complete control and ownership over the software, else, might be possible you will find yourself in a situation where you have spent lots of money on development of software and got nothing in return.
Tough, there can’t be “One Size Fits All” kind of contract for software/ app development, but in this Article, we would emphasize our focus area to make Businessman understand the clauses and negotiation points to be discussed while taking services of software developer.
The decision to automate your agency or to change your current Agency Management System is a challenging endeavor—figuring out which one to choose, even more so.
This software package boasts of a seamless integration of income-generating program modules. Data from the offices of Treasury and Assessor are integrated and funneled to the Mayor\'s or Administrator’s Office for better administrative performance and efficient delivery of services.
The frequency of software vendor license audits is skyrocketing. Are you ready? This bulletin discusses why many enterprises are unintentionally out of compliance, and self-audit tactics to help minimize or negate audit penalties.
"The contents of the slide do not constitute any legal advice and is meant only for the purpose of general guidance to the readers, in case of specifc issues please seek appropiate advice".
Enchancing adoption of Open Source Libraries. A case study on Albumentations.AIVladimir Iglovikov, Ph.D.
Presented by Vladimir Iglovikov:
- https://www.linkedin.com/in/iglovikov/
- https://x.com/viglovikov
- https://www.instagram.com/ternaus/
This presentation delves into the journey of Albumentations.ai, a highly successful open-source library for data augmentation.
Created out of a necessity for superior performance in Kaggle competitions, Albumentations has grown to become a widely used tool among data scientists and machine learning practitioners.
This case study covers various aspects, including:
People: The contributors and community that have supported Albumentations.
Metrics: The success indicators such as downloads, daily active users, GitHub stars, and financial contributions.
Challenges: The hurdles in monetizing open-source projects and measuring user engagement.
Development Practices: Best practices for creating, maintaining, and scaling open-source libraries, including code hygiene, CI/CD, and fast iteration.
Community Building: Strategies for making adoption easy, iterating quickly, and fostering a vibrant, engaged community.
Marketing: Both online and offline marketing tactics, focusing on real, impactful interactions and collaborations.
Mental Health: Maintaining balance and not feeling pressured by user demands.
Key insights include the importance of automation, making the adoption process seamless, and leveraging offline interactions for marketing. The presentation also emphasizes the need for continuous small improvements and building a friendly, inclusive community that contributes to the project's growth.
Vladimir Iglovikov brings his extensive experience as a Kaggle Grandmaster, ex-Staff ML Engineer at Lyft, sharing valuable lessons and practical advice for anyone looking to enhance the adoption of their open-source projects.
Explore more about Albumentations and join the community at:
GitHub: https://github.com/albumentations-team/albumentations
Website: https://albumentations.ai/
LinkedIn: https://www.linkedin.com/company/100504475
Twitter: https://x.com/albumentations
Goodbye Windows 11: Make Way for Nitrux Linux 3.5.0!SOFTTECHHUB
As the digital landscape continually evolves, operating systems play a critical role in shaping user experiences and productivity. The launch of Nitrux Linux 3.5.0 marks a significant milestone, offering a robust alternative to traditional systems such as Windows 11. This article delves into the essence of Nitrux Linux 3.5.0, exploring its unique features, advantages, and how it stands as a compelling choice for both casual users and tech enthusiasts.
A tale of scale & speed: How the US Navy is enabling software delivery from l...sonjaschweigert1
Rapid and secure feature delivery is a goal across every application team and every branch of the DoD. The Navy’s DevSecOps platform, Party Barge, has achieved:
- Reduction in onboarding time from 5 weeks to 1 day
- Improved developer experience and productivity through actionable findings and reduction of false positives
- Maintenance of superior security standards and inherent policy enforcement with Authorization to Operate (ATO)
Development teams can ship efficiently and ensure applications are cyber ready for Navy Authorizing Officials (AOs). In this webinar, Sigma Defense and Anchore will give attendees a look behind the scenes and demo secure pipeline automation and security artifacts that speed up application ATO and time to production.
We will cover:
- How to remove silos in DevSecOps
- How to build efficient development pipeline roles and component templates
- How to deliver security artifacts that matter for ATO’s (SBOMs, vulnerability reports, and policy evidence)
- How to streamline operations with automated policy checks on container images
How to Get CNIC Information System with Paksim Ga.pptxdanishmna97
Pakdata Cf is a groundbreaking system designed to streamline and facilitate access to CNIC information. This innovative platform leverages advanced technology to provide users with efficient and secure access to their CNIC details.
GridMate - End to end testing is a critical piece to ensure quality and avoid...ThomasParaiso2
End to end testing is a critical piece to ensure quality and avoid regressions. In this session, we share our journey building an E2E testing pipeline for GridMate components (LWC and Aura) using Cypress, JSForce, FakerJS…
Unlocking Productivity: Leveraging the Potential of Copilot in Microsoft 365, a presentation by Christoforos Vlachos, Senior Solutions Manager – Modern Workplace, Uni Systems
Generative AI Deep Dive: Advancing from Proof of Concept to ProductionAggregage
Join Maher Hanafi, VP of Engineering at Betterworks, in this new session where he'll share a practical framework to transform Gen AI prototypes into impactful products! He'll delve into the complexities of data collection and management, model selection and optimization, and ensuring security, scalability, and responsible use.
DevOps and Testing slides at DASA ConnectKari Kakkonen
My and Rik Marselis slides at 30.5.2024 DASA Connect conference. We discuss about what is testing, then what is agile testing and finally what is Testing in DevOps. Finally we had lovely workshop with the participants trying to find out different ways to think about quality and testing in different parts of the DevOps infinity loop.
Climate Impact of Software Testing at Nordic Testing DaysKari Kakkonen
My slides at Nordic Testing Days 6.6.2024
Climate impact / sustainability of software testing discussed on the talk. ICT and testing must carry their part of global responsibility to help with the climat warming. We can minimize the carbon footprint but we can also have a carbon handprint, a positive impact on the climate. Quality characteristics can be added with sustainability, and then measured continuously. Test environments can be used less, and in smaller scale and on demand. Test techniques can be used in optimizing or minimizing number of tests. Test automation can be used to speed up testing.
Removing Uninteresting Bytes in Software FuzzingAftab Hussain
Imagine a world where software fuzzing, the process of mutating bytes in test seeds to uncover hidden and erroneous program behaviors, becomes faster and more effective. A lot depends on the initial seeds, which can significantly dictate the trajectory of a fuzzing campaign, particularly in terms of how long it takes to uncover interesting behaviour in your code. We introduce DIAR, a technique designed to speedup fuzzing campaigns by pinpointing and eliminating those uninteresting bytes in the seeds. Picture this: instead of wasting valuable resources on meaningless mutations in large, bloated seeds, DIAR removes the unnecessary bytes, streamlining the entire process.
In this work, we equipped AFL, a popular fuzzer, with DIAR and examined two critical Linux libraries -- Libxml's xmllint, a tool for parsing xml documents, and Binutil's readelf, an essential debugging and security analysis command-line tool used to display detailed information about ELF (Executable and Linkable Format). Our preliminary results show that AFL+DIAR does not only discover new paths more quickly but also achieves higher coverage overall. This work thus showcases how starting with lean and optimized seeds can lead to faster, more comprehensive fuzzing campaigns -- and DIAR helps you find such seeds.
- These are slides of the talk given at IEEE International Conference on Software Testing Verification and Validation Workshop, ICSTW 2022.
Threats to mobile devices are more prevalent and increasing in scope and complexity. Users of mobile devices desire to take full advantage of the features
available on those devices, but many of the features provide convenience and capability but sacrifice security. This best practices guide outlines steps the users can take to better protect personal devices and information.
Epistemic Interaction - tuning interfaces to provide information for AI supportAlan Dix
Paper presented at SYNERGY workshop at AVI 2024, Genoa, Italy. 3rd June 2024
https://alandix.com/academic/papers/synergy2024-epistemic/
As machine learning integrates deeper into human-computer interactions, the concept of epistemic interaction emerges, aiming to refine these interactions to enhance system adaptability. This approach encourages minor, intentional adjustments in user behaviour to enrich the data available for system learning. This paper introduces epistemic interaction within the context of human-system communication, illustrating how deliberate interaction design can improve system understanding and adaptation. Through concrete examples, we demonstrate the potential of epistemic interaction to significantly advance human-computer interaction by leveraging intuitive human communication strategies to inform system design and functionality, offering a novel pathway for enriching user-system engagements.
Alt. GDG Cloud Southlake #33: Boule & Rebala: Effective AppSec in SDLC using ...James Anderson
Effective Application Security in Software Delivery lifecycle using Deployment Firewall and DBOM
The modern software delivery process (or the CI/CD process) includes many tools, distributed teams, open-source code, and cloud platforms. Constant focus on speed to release software to market, along with the traditional slow and manual security checks has caused gaps in continuous security as an important piece in the software supply chain. Today organizations feel more susceptible to external and internal cyber threats due to the vast attack surface in their applications supply chain and the lack of end-to-end governance and risk management.
The software team must secure its software delivery process to avoid vulnerability and security breaches. This needs to be achieved with existing tool chains and without extensive rework of the delivery processes. This talk will present strategies and techniques for providing visibility into the true risk of the existing vulnerabilities, preventing the introduction of security issues in the software, resolving vulnerabilities in production environments quickly, and capturing the deployment bill of materials (DBOM).
Speakers:
Bob Boule
Robert Boule is a technology enthusiast with PASSION for technology and making things work along with a knack for helping others understand how things work. He comes with around 20 years of solution engineering experience in application security, software continuous delivery, and SaaS platforms. He is known for his dynamic presentations in CI/CD and application security integrated in software delivery lifecycle.
Gopinath Rebala
Gopinath Rebala is the CTO of OpsMx, where he has overall responsibility for the machine learning and data processing architectures for Secure Software Delivery. Gopi also has a strong connection with our customers, leading design and architecture for strategic implementations. Gopi is a frequent speaker and well-known leader in continuous delivery and integrating security into software delivery.
Securing your Kubernetes cluster_ a step-by-step guide to success !KatiaHIMEUR1
Today, after several years of existence, an extremely active community and an ultra-dynamic ecosystem, Kubernetes has established itself as the de facto standard in container orchestration. Thanks to a wide range of managed services, it has never been so easy to set up a ready-to-use Kubernetes cluster.
However, this ease of use means that the subject of security in Kubernetes is often left for later, or even neglected. This exposes companies to significant risks.
In this talk, I'll show you step-by-step how to secure your Kubernetes cluster for greater peace of mind and reliability.
1. Frequently Asked Questions: The New Computer and Software Services Tax Effective 7/31/13
The Department has received a number of questions about the new sales and use tax applicable to computer system
design services and modification, integration, enhancement, installation or configuration of prewritten software,
described in Technical Information Release 13-10. Following are responses to some frequently asked questions, which
DOR intends to update as additional inquiries are received. These FAQs are not public written statements of the
Department, but are intended to be informational only as described in 830 CMR 62C.3.2(10)(c).
1. What is prewritten software?
A: “Prewritten software, also known as canned software and standardized software,” is defined in the existing Computer
Industry Products and Services Regulation, 830 CMR 64H.1.3, as follows:
“computer software, including prewritten upgrades, which is not designed and developed by the author or other
creator to the specifications of a specific purchaser. The combining of two or more prewritten computer
software programs or prewritten portions thereof does not cause the combination to be other than prewritten
computer software. Prewritten computer software includes software designed and developed by the author or
other creator to the specifications of a specific purchaser when it is sold to a person other than the specific
purchaser. Where a person modifies or enhances computer software of which the person is not the author or
creator, the person shall be deemed to be the author or creator only of such person's modifications or
enhancements. …”
This definition is based on the Streamlined Sales and Use Tax Agreement, which has been adopted by 24 other states.
Sales and licenses of prewritten software have been subject to tax in Massachusetts for many years, and beginning April
1, 2006 sales of prewritten software have included software that is electronically transferred or accessed through the
Internet.
2. What are modifications to prewritten software that are taxable under the new law?
A. Modifications to prewritten software that are subject to tax under the new law are modifications to software which
is licensed, sold or otherwise made available to more than one user, where such prewritten software is modified for the
use of a specific customer. The modification may be made either by the original seller/licensor of the software or by a
third party. For purposes of this tax on modification, integration, enhancement, installation or configuration of
standardized (prewritten) software, prewritten software does not include proprietary code owned by the provider
(seller) of the modifications if that proprietary code is not separately licensed to customers. Custom application
software (including custom software that incorporates such proprietary code) that is designed to run on a prewritten
operating system is treated as custom software and not as a modification of the prewritten operating system software.
3. Suppose prewritten or customized software is licensed but not sold. Is that subject to sales tax?
A. Yes, licensing software is treated as a sale for purposes of sales and use tax. See 830 CMR 64H.1.3(3).
4. In the Department’s Computer Industry Regulation 830 CMR 64H.1.3 (6) there is an exemption for sales of custom
software and a discussion of custom modifications to prewritten software. How is this exemption to be reconciled
with the new law in which “the modification, integration, enhancement, installation or configuration of standardized
software” are taxable?
A. The regulation to which you refer has been superseded (and thus made obsolete) in some respects by the new
legislation. To the extent that the regulation is inconsistent with any of the new statutory provisions or TIR 13-10, it has
been superseded by the change in law. The Department intends to amend the regulation so that it will reflect the new
statutory rules that are now effective.
5. When does the sales tax on computer and software-related services take effect?
A. The effective date is set by legislation at July 31, 2013.
6. Are troubleshooting computer services generally provided at the customer’s home or place of business taxable?
2. A: Generally, service technician charges for determining why a customer’s hardware or software is not working properly
are not taxable. This may include reinstallation of software that was already on the customer’s computer. If additional
hardware or software is provided to the customer during the service call, the rules in 830 CMR 64H.1.1, Service
Enterprises, apply. If the service technician sells the customer a subscription to prewritten software, such as antivirus
protection, those charges would be subject to the tax on prewritten software.
7. We are a computer service and IT support company located in Massachusetts. We occasionally install Microsoft
Office and operating system software into computers for our customers. We purchase the software and tax the end
user but do not tax the labor for installing the software into the computer. Are you saying with this new law, we
charge tax on the software and labor as well?
A. Yes, that is correct, both the taxable prewritten software and installation charges are subject to tax on and after July
31, 2013.
8. Am I correct in interpreting the law change as meaning that technical support and training are not part of the
above definition of taxable services?
A. Yes, technical support and training that do not otherwise involve the transfer of taxable prewritten software or
tangible personal property to the customer remain nontaxable under the new law.
9. How does the new tax apply to use of Open Source software?
A. Open Source software is available free on the Internet. Thus, no tax applies to the transfer of Open Source software
where there is no consideration for the transfer. If a seller customizes Open Source software and sells it to one or more
customers to be used on any electronic device, that customized software is subject to tax.
10. Is Website Design a taxable service?
A. The Department understands that website design may be accomplished in various ways. If the website designer is
configuring or modifying Open Source (free) code or other prewritten software for the needs of a customer, the
designer’s charges to that customer are subject to tax. If the website designer is creating custom software for its
customer (that is, not based on other prewritten software), then the charges are not taxable. See definition of
prewritten software in question #1 and description of taxable modifications to prewritten software in question #2.
11. For a Massachusetts vendor whose services involve the creation/modification/enhancement of a client’s website
that will reside (be hosted) on an unrelated third party’s servers, and not operate on the client’s computer systems, is
the vendor responsible for collecting sales tax on these services provided to Massachusetts based clients?
A. Generally, yes. See answer to #10, above. The location where the website is hosted and the ownership of that server
do not determine taxability.
12. Is website hosting taxable under the new statutory provisions?
A. No, website hosting is non-taxable under prior and current law.
13. Are data storage and disaster recovery services taxable?
A: No, data storage (in the “cloud”) or disaster recovery and backup services (in the “cloud”) remain nontaxable
services.
14. If I have subcontractors working on a taxable computer system design services project, how should that be
handled?
A. If you are a Massachusetts registered vendor, you may give a resale certificate, ST-4, to subcontractors performing
taxable services that will be resold to your customer.
15. Suppose a computer system is designed but not actually built, so software is never actually integrated with
hardware. Are the services still subject to sales tax?
3. A. No, the tax does not apply to design or consulting services that do not result in a sale of a computer system that
integrates computer hardware, software or communication technologies.
16. Suppose prewritten or customized software is written for the ultimate use of a nonprofit organization, but it is
sold to a for-profit organization that intends to license or sell the software to the nonprofit. Is it subject to sales tax
at any stage?
A. No, provided that the only retail sale is to the non-profit entity. The for-profit intermediary could purchase the
taxable software and taxable services with a resale certificate (ST-4) and then take an exemption certificate (ST-5) from
its non-profit customer. The sale to the for-profit entity would be exempt as a “sale for resale” under G.L. c. 64H, § 8.
17. The software I am writing is largely web-based. If the server on which it runs is outside the Commonwealth, is it
then not taxable? But the resulting service (provided by the software) will be used by people all over the US, so then
is the portion of use in Massachusetts taxable?
A. The location of the server is not relevant. Yes, the portion of the software purchased for use in Massachusetts is
taxable. In these circumstances, the seller need not collect tax on the sale provided that the buyer gives the seller an
MPU (Multiple Points of Use) certificate, in which case the buyer will pay tax only on the Massachusetts portion of the
use and must file a use tax return to report such tax. The “sourcing” of the service – to Massachusetts or to one or more
other states – should be the same as the sourcing of the sale of the prewritten software.
18. I've been writing software under contract for a couple of years now, but have not yet actually been paid for any
of it. Are my services prior to July 31, 2013 not subject to the tax, even though I will not be paid until after July 31,
2013? (The contract specifies an hourly rate, but payment is conditional on revenue to my customer.)
A. Services performed before the effective date of the new legislation are not taxable even if paid after July 31, 2013.
19. Currently many sellers of service sell blocks of hours in an effort to reduce their customer’s labor cost for services.
From an accounting perspective this labor is classified as deferred revenue and is recognized when the services are
delivered. Thus a customer can purchase 100, 200, 300 hours at a discounted price and use them over the course of a
year or many years. For hours purchased prior to 7/31/13 – are these considered non-taxable as they were purchased
under the old guidance?
A. TIR 13-10 provides the following: “Contracts for taxable Computer/Software Services entered into before July 31,
2013 are not taxable except to the extent a payment under such a contract is invoiced or billed (or if not invoiced or
billed, due under the terms of the contract) on or after July 31, 2013 and only to the extent that the payment relates to
services performed on or after July 31, 2013.” Prepaid hours purchased and paid for before July 31, 2013 will not
become taxable, even for services performed on and after July 31, 2013.
20. An attorney or accountant uses prewritten software to prepare a document or a tax return. How does the sales
tax apply?
A. The attorney or accountant must pay sales or use tax on any prewritten software used in their practices in
Massachusetts, including custom modifications. The attorney’s and accountant’s work product to clients is not subject
to sales or use tax.
21. Will the sale of installation services of prewritten software be subject to MA sales/use tax when not sold in
conjunction with computer system design or customization of prewritten software?
A. Yes, for sales on or after July 31, 2013.
22. Will the sale of installation services of prewritten software be subject to MA sales/use tax when sold in
conjunction with computer system design or customization of prewritten software?
A. Yes, for sales on or after July 31, 2013.
23. When you create a local area network (LAN) you are connecting computers to a server, a router, a switch, a
firewall, and you are installing an Operating System on the network to allow for file sharing, print sharing, and
resource sharing. Specific questions:
4. a. If you are a vendor designing and implementing a LAN is this a taxable service?
b. If you are adding additional functionality and/or workstations to a LAN is this a taxable service?
c. If you are maintaining, patching, or adding security software (Anti-Virus, Spam, Spyware etc.) are these taxable
services?
A. The answer to all three questions is yes, these services either fall within the definition of taxable computer system
design services or are taxable sales of prewritten software.
24. I am a Massachusetts vendor selling software and computer services that will be taxable on and after July 31,
2013. How does the tax apply to my out-of-state clients?
A. Generally, the sourcing rules in Section III C of the TIR would source the sale to your customer’s out-of-state location
unless the customer comes to your business location for receipt of the service. Where sale of the taxable service or
product is sourced outside of Massachusetts, no Massachusetts tax is due.
25. I have purchased taxable computer or software services and given the seller an MPU exemption certificate. How
and when do I self-report use tax?
If the purchaser of taxable computer or software services gives an MPU certificate and has no sales tax to report as a
vendor, it must electronically file an annual business use tax return on Form ST-10 through WebFile for Business; that
return is due on or before April 15th
for the prior calendar year. If the purchaser also has sales tax to report as a vendor,
it must electronically file Form ST-9 through WebFile, reporting both sales and use tax on a monthly basis.
26. During implementation of a new computer system for a customer there is often the need for data conversion
and/or data migration of a customer’s data from the customer’s legacy software to the new system. These data
services may include, but are not limited to, formatting data, loading of data, data monitoring, data migration, and
data conversion. Data conversion is a process of converting computer data from one format to another. If the
charges for this data conversion/data migration are separately invoiced, are they taxable or exempt under the new
law and the guidance in TIR 13-10? Does Massachusetts view data conversion and data migration performed during a
computer software implementation project, even when separately stated and invoiced, as taxable under the new
law?
A. No, the services you describe regarding data conversion and data migration are considered exempt data processing
services and remain non-taxable under the new law so long as the charges are separately stated and set in good faith.
27. How does a vendor of taxable computer and software services register to collect Massachusetts sales and use
tax?
A. If not previously registered with DOR, a vendor must register for sales tax on-line through WebFile for Business at
www.mass.gov/dor. Note that the registration process may take several days, as DOR must authenticate the identity of
the registrant.
28. What exemptions apply to sales of taxable computer and software services?
A. Many of the sales and use exemptions in General Laws Chapter 64H, section 6, apply to sales of taxable computer
and software services. For example, sales and use tax exemptions apply to sales to the United States, the
Commonwealth or any political subdivision thereof, or their respective agencies under G.L. c. 64H, section 6(d) or to
sales to 501(c)(3) organizations as provided in G.L. c. 64H, section 6(e).
29. When is the first return due for a vendor of taxable computer or software services?
A. The first return is due on or before September 20, 2013, which must include taxable sales for the month of August
and for the one day of July 31, 2013 (the effective date of the changes).
30. Does this law require us to collect sales tax for service involving the upgrade of Microsoft software (e.g., Windows
XP to Windows 7 upgrade)?
5. A. Charges for sales and installation of software upgrades are taxable on and after July 31, 2013. (The sale of the
software and upgrades, but not the installation, was taxable under prior law.)
31. Does this law require us to collect sales tax for any service involving Microsoft software which is preinstalled on a
computer (e.g., removing a virus)?
A. If the service only involves removing a virus from software/hardware already owned by the customer, no tax applies,
even if the existing software must be reinstalled.
32. I am an IT vendor based out of New Hampshire with many Massachusetts clients. Am I required to collect this
new Massachusetts tax (in TIR 13-10) from my Massachusetts clients?
A. Under current law, whether or not a vendor is required to collect Massachusetts sales tax depends on whether the
vendor has or exercises some form of physical presence in Massachusetts. This is the same longstanding rule that
applies to sellers of tangible personal property. Physical presence could include, for example, having a business location
such as an office in Massachusetts or visiting customer facilities in in Massachusetts for sales purposes or to perform
services. If the vendor has such physical presence, it should register as a Massachusetts vendor as described in FAQ #
27. If it does not have physical presence in Massachusetts, its Massachusetts customers will be required to self-report
and pay use tax on their purchases of taxable goods and services.
33. My company helps design a new server system for the customer and provide specifications. The customer
purchases the equipment and software from an unrelated third party. My company then sets up the equipment and
installs/configures the software.
A. This is a taxable computer system design service; the fact that the equipment and software is purchased from an
unrelated third party does not change that result. Contrast with FAQ #15 where no hardware or software are sold.
34. How do Software as a Service (SaaS) vendors handle the sourcing issue?
A. Generally, sales by Software as a Service (SaaS) vendors are treated as sales of access to prewritten software, taxable
under prior and current law, and sourced as provided in Section III C of TIR 13-10. Generally, the sale is sourced to the
customer’s location and if that location is in Massachusetts, the Massachusetts sales tax either must be collected by the
vendor or the vendor must obtain an MPU exemption certificate from its customer, who will assume responsibility for
self-reporting and paying apportioned use tax.
35. If Vendor X uses computer services personnel to develop custom software solutions based on pre-existing
software for a customer, and passes all work to third-party vendors outside the State (effectively just marking up the
value of services in return for managing the delivery and taking the risk), does the customer have to pay sales & use
tax on the total value of the contract?
A. Yes, under these facts, the sales price subject to tax is the total value of the contract as described above. The
Massachusetts registered Vendor X should give a resale certificate (ST-4) to the third party vendors providing software
or services that will be resold. Vendor X must generally collect and remit tax on sales to Massachusetts customers or ask
them to provide an MPU certificate (ST-12) at the time of the sale, in which case the customer will be responsible for
self-reporting and remitting apportioned use tax and Vendor X would not be required to collect tax.
36. I'm an independent software contractor. My current client is a company in Massachusetts that designs and
manufactures equipment used in the production of carbon-composite components in a wide variety of industries.
They make the manufacturing hardware and assemble and program the computers which control that hardware. I've
been engaged to help them write some of those programs. The software I write is directly to my client's
specifications; I don't write a program and sell it to them, I present them with an invoice for my hours. It is all new,
custom software written in C# and Java, and does not currently involve integrating third party programs or packages.
A. Under the facts you describe, such custom software is not subject to tax.
37. My client sells Service Agreements for security systems that involve maintenance of the hardware (not computer
system or software related) and upgrades to the software – if necessary – to the latest version. The price of the
agreement is paid at commencement of the agreement, not execution of it. How should this be handled? To apply
sales tax on the entire maintenance agreement would be taxing the customer on maintenance as well as upgrades,
6. but there is no way of telling at the beginning of the agreement what portion of the amount paid up front will be for
software upgrades and what portion is for the maintenance and repair of hardware.
A. Your client is providing maintenance services to tangible personal property and therefore should apply the rules in
830 CMR 64H.1.1(5)(g) relating to tax on such contracts. Generally, the provider of this type of maintenance service
contract is the consumer of any tangible personal property, including prewritten software and upgrades, that are used in
the performance of the contract. Your client, the service contract provider, would be responsible for use tax on the
software and upgrades. Generally, no tax need be charged to the customer on these facts, unless there is an additional
charge for non-covered tangible personal property, including software or upgrades (or for computer or software services
taxable under the new law) that are sold by the service contract provider to the customer. These rules are essentially
unchanged by the new law.
38. If I provide professional software services, consulting and project management as an individual should I charge
the 6.25% sales tax?
A. Whether you are a sole proprietor or a corporation or other form of business entity does not affect whether you are
making taxable sales. If the services you are providing to Massachusetts customers fall within those described in TIR 13-
10, you should be collecting the 6.25% sales tax on those services performed after July 31, 2013.
39. We are a small corporation in Massachusetts whose business is that of a value-added reseller of “canned”
software. Basically, what we do is (a) sell packaged software (that was developed in outside Massachusetts) and
install the software (we already charge sales tax on this), (b) provide training on the software, and (c) offer a few
other additional services as to which we are trying to determine taxability under the new law, specifically:
(1) We convert data from old software our client used, in order to be able to use that data with the new software
we sell.
(2) We manipulate data, e.g., when our client decides it wants to add an additional digit to a general ledger code,
etc.
(3) We re-enter data for a client when it needs to transfer information to an additional module of our software or
from another software.
(4) We pull information from the software and put it into a “query” or a “report” for the client.
(5) We edit existing reports or queries for the client when it wants to add or subtract information to a report or
query.
A. The “additional services” you describe in (1) – (5) above appear to be non-taxable data processing services and no tax
is due if the charges for these services are separately stated, reasonably allocated charges, under prior or current law.
We are assuming that the activity in (5) involves helping the customer to use existing capabilities/options already
included in the prewritten software rather than adding or changing the code itself.
40. My company employs a number of individuals who perform tasks such as the modification, integration,
enhancement, installation or configuration of prewritten software for internal use by the company (not for sale to the
public or unrelated third parties). Is sales or use tax due on their services?
A. No, the tax on software/computer services does not apply to services performed by an employee for his/her
employer or services rendered by one member of an affiliate group to another member of that group. A company
purchasing prewritten software that is not otherwise exempt must pay sales or use tax on such software under both
prior and current law.
41. Company Y uses temporary employees from a temporary staffing agency – the staffing agency is regularly
engaged in the temporary employee staffing business and provides that service to multiple unrelated clients as part
of its regular business activities. The temporary employees work under the direction and control of Company Y and
perform tasks in a similar manner as the company’s permanent employees.
7. A. Under those circumstances, the services of temporary employees to Company Y would be treated in a similar manner
as Company Y’s permanent employees and would not be subject to sales or use tax, even if the employees are
performing tasks involving modification, integration, enhancement, installation or configuration of prewritten software.
42. Is domain name registration a taxable service? A domain name registrar is an organization or commercial entity
that manages and registers the reservation of Internet domain names.
A. Domain name registration is not a taxable service.
43. Is domain privacy a taxable service? Domain privacy is a service offered by a number of domain name registrars.
A user buys privacy from the company and the company replaces the user's info in the “WHOIS” with the info of a
forwarding service (for email and sometimes postal mail) done by a proxy server.
A. Providing domain privacy is not a taxable service.
44. I am a consultant who provides user experience design services to my clients. Clients are large or small software
companies in various locations. I help them understand how to build a product that their customers can use easily.
Familiar terms like “usability” and “ease of use” come from this work. Ultimately, my clients are responsible for
actually doing the software design and implementation to create the product. While one could describe the work as
“Website design,” it is very different from the description of Website design in the FAQ #10. That description focuses
on writing the software (from scratch or by modifying existing software). The result of my work is a series of
recommendations, not software. This is typically a set of sketches of Web pages in the proposed design, and a
description of how each part of the user interface should work. There may also be some simple HTML code to allow
the client to click from one page to the next, but that code is not for delivery to the consumer; it’s essentially a way of
animating the sketches so the client can see what the user’s experience would be in the final product. When I deliver
the design, it’s up to my client to do the software design and implementation.
A. The design services you describe are nontaxable personal services. The service you provide to your customers does
not involve the modification, integration, enhancement, installation or configuration of prewritten software.
45. I’m an independent software contractor. Although I'm not currently doing so, it would not be unusual for
someone in my line of work to be asked to use a third-party product, e.g., a math library or graphics library. The
actual effort involved in integrating such a product is typically trivial - literally a few minutes - although it often makes
possible lots of enhancements to a client's product - such enhancements would not be integration; they would be
wholly new original work. So how do I know when and how I need to start accounting for such work? (Note, this is a
follow-up question from FAQ #36, in which the seller was providing non-taxable custom software services.)
A. While the services of integrating a third-party software product into the customer’s software would generally be
taxable, there is an exception where taxable services are bundled with nontaxable services and (1) the value of the
taxable services is inconsequential within the meaning of 830 CMR 64H.1.1, that is, valued as less than 10% of the total
sale, (2) that value is determined in good faith and (3) the service provider is not the vendor of the taxable prewritten
software or product being integrated into the customer’s software. In those circumstances, the service provider is not
required to collect and remit tax on such inconsequential integration services unless the charges for such services are
separately stated. Charges for prewritten software remain taxable; in this example the customer is responsible for sales
or use tax on the third-party prewritten software product.
46. One of our clients is located in Massachusetts, and we were looking for clarification on one of the services they
provide to out-of-state clients. Their out-of-state clients will ship their hardware to Massachusetts to have their
existing hard drives imaged to a newer hard drive and then it is shipped back to the client. The imaging includes files
and software uploading. Does this service being completed in state qualify for sales tax?
A. Separately stated charges for data transfer and reinstallation of the customer’s software on a new hard drive are not
taxable. Sales of prewritten software (including installation) and hardware are taxable. Applying the sourcing rules in
TIR 13-10, III, C, tax would be due if your client’s customer picked up the computer at your client’s business location in
Massachusetts. If your client ships the computer to an out-of state customer for use outside Massachusetts, no
Massachusetts tax is due.
8. 47. We install firewalls (owned by us) at client sites and charge clients a monthly fee. We monitor the device, apply
updates, replace the hardware if it fails, etc. – is this monthly fee taxable?
A. As we understand the facts, you provide your customers with both hardware and prewritten software for a monthly
fee. The monthly fee is taxable under prior and current law.
48. We provide a spam filtering service for our clients – we install McAfee on client servers and charge a monthly fee
based on the number of users. Is this taxable?
A. This monthly fee is taxable as a sale of prewritten software under prior and current law.
49. I read TIR 13-10 regarding the new sales tax regulations affecting Computer and Software Services. However, I did
not see any mention of changes to the taxability of optional software maintenance contracts. Does that mean the
rules have not changed and that they are still considered nontaxable if they meet the requirements?
A. The rules have not changed with respect to optional software maintenance contracts which include software
upgrades, enhancements or updates of prewritten software as more fully described in 830 CMR 64H.1.3(7). Generally,
these contracts are 50% taxable.
50. I understand that if we install new software there is a tax for the labor. However, we have what we call a
Managed Monthly Service which watches over our customer’s software to make sure it is running smoothly. Do we
need to charge tax every month for the service to our customers in Massachusetts?
A. This is a nontaxable service unless it includes upgrades, enhancements or updates of prewritten software as
described in FAQ #49.
51. Some customers purchase software for which there is a sales tax charged. Every year thereafter an annual fee is
charged to these customers related to this software, but the contract is for “training, and telephone support only”. Is
this annual fee taxable even when the services provided for that service plan are nontaxable under the new law?
A. A contract that only provides for training and telephone support but not upgrades, enhancements or updates of
prewritten software is not taxable under prior or current law. Also see FAQs #49 and #50.
52. Are 501(c)(4) entities also exempt from the new computer design sales tax? If all of my clients are exempt from
paying sales tax on my services, then must I still register, and must I still make regularly filings?
A. The sales tax exemption in G.L. c. 64H, §6(e) is only for 501(c)(3) entities and to the extent that the taxable item will
be used in the conduct of the organization’s religious, charitable, or educational mission. Other types of entities under
IRC S 501(c) are not exempt from sales tax. If you have only non-taxable sales, you do not need to register as a sales tax
vendor, but you should retain exemption certificates, Form ST-5, from your customers in the event you are contacted for
audit.
53. We are a telecommunications company who frequently goes to customer’s sites to relocate extensions. When
relocating the extensions we obviously have to reprogram them to the appropriate locations, is this taxable? Also
when we have a service issue (i.e., phone not working properly) and we have to make a program change (i.e., call
forwarding, speed dial, etc.) to resolve the service issue, is this taxable?
A. A repair or maintenance service involving inconsequential configuration of existing software is not a taxable sale of
prewritten software nor is it taxable as a computer design service or modification of prewritten software as described in
TIR 13-10. (Also see FAQ #45.) The telecommunications company is responsible for sales or use tax on prewritten
software or taxable computer/software services purchased and consumed in the provision of telecommunications
services to its customers.
54. I represent a business that offers cloud-based advertising services for businesses both within and without
Massachusetts. More specifically, my client's customers use the service to do the following:
(1) store video files that are then made available to consumers via a URL; (2) modify their own webpage that is also
made available to consumers via a URL; (3) generate text messaging campaigns for consumers; and (4) for some
customers who are authorized resellers of the services, a personalized - but automated - version of the company's
9. website is provided. My client's so-called "software as a service" is sold on a subscription basis; the customer has no
permanent ownership of or license to the software. Further, my client does not offer any design services specific to
any customer. Once access is granted to the cloud-based service, the customer is responsible for all content and
modifications. We believe these services fall under the sales tax exemption for "data access, data processing or
information services", but would like confirmation given the confusion related to the new law.
A. Typically, sales of access to prewritten software on the seller’s or a third party’s server are taxable as provided in 830
CMR 64H.1.3 , whether described as “software as a service” or otherwise. Your client’s customers are using prewritten
software to disseminate their own advertising/information. No additional content or information is being provided by
the seller. This is a taxable sale under prior and current law.
55. I sometimes assist clients with upgrading prewritten software which was purchased before 7/31/13. The
upgrades to which I refer are free. Would these services be taxable if they were performed on software purchased
after 7/31/13? Are they taxable if performed on software the company already owns and on which they were not
previously required to pay sales tax?
A. Prewritten software was taxable under prior law. Downloaded prewritten software and prewritten software
accessed through the Internet have been taxable since 2006. Charges for the services of modification, integration,
enhancement, installation or configuration of prewritten software are taxable if the services were provided on and after
7/31/13, regardless of when the underlying software was purchased or whether any software upgrades are “free.”
Kindly send any additional questions and or comments to rulesandregs@dor.state.ma.us.