A license to use software that is downloaded electronically by
the customer is a service transaction and is not subject to Florida sales tax,
regardless of whether or not the software is customized or canned, provided it
is not part of the sale of tangible personal property.
Additionally, a service
agreement that covers the cost of maintaining, repairing, or replacing software
that was electronically downloaded is also exempt. If your client or your company purchased
electronically downloaded software during the last three years, they may be entitled to refund.
FLORIDA
STATUTES
Section 212.05, F.S., provides that the sale of tangible personal property is subject to tax. The term “sale” includes a license to use tangible personal property. See Section 212.02(15), F.S. Service only transactions, except those authorized for taxation by Chapter 212, F.S., are generally not subject to tax. When tangible personal property and services are a part of the same sale, the entire sales price is subject to tax. See Section 212.02(16), F.S. Software supplied on a tangible medium is taxable. Charges for services that are part of the sale of such taxable software are part of the sales price and are subject to sales tax.
Rule 12A-1.032, F.A.C., provides that a sale of customized software is a service transaction and is not subject to sales tax provided the customized software is not part of the sale of other tangible personal property. Likewise exempt is a sale that solely involves software, canned or customized, that is provided to the customer in an electronic format, as there is no conveyance of tangible personal property. Keep in mind that electronically accessed software is subject to Florida sales tax when sold as part of the sale of tangible personal property.
Section 212.05, F.S., provides that the sale of tangible personal property is subject to tax. The term “sale” includes a license to use tangible personal property. See Section 212.02(15), F.S. Service only transactions, except those authorized for taxation by Chapter 212, F.S., are generally not subject to tax. When tangible personal property and services are a part of the same sale, the entire sales price is subject to tax. See Section 212.02(16), F.S. Software supplied on a tangible medium is taxable. Charges for services that are part of the sale of such taxable software are part of the sales price and are subject to sales tax.
Rule 12A-1.032, F.A.C., provides that a sale of customized software is a service transaction and is not subject to sales tax provided the customized software is not part of the sale of other tangible personal property. Likewise exempt is a sale that solely involves software, canned or customized, that is provided to the customer in an electronic format, as there is no conveyance of tangible personal property. Keep in mind that electronically accessed software is subject to Florida sales tax when sold as part of the sale of tangible personal property.
Section 212.0506, F.S., indicates that an agreement that covers the cost of
maintaining, repairing, or replacing canned or prepackaged software (tangible
personal property) is subject to sales tax, while an agreement that covers
the cost of maintaining, repairing, or replacing customized software or
software that was downloaded electronically is not subject to sales tax.
BOTTOM LINE:
Please know that a Technical Assistance Advisement under section 213.22, F.S. is binding on the Department only under the facts and circumstances described in the request.
Your client or your company's facts will determine whether or not a sale or purchase of software is taxable; but, the bottom line is if software is downloaded electronically it is not subject to Florida sales tax.
BOTTOM LINE:
Please know that a Technical Assistance Advisement under section 213.22, F.S. is binding on the Department only under the facts and circumstances described in the request.
Your client or your company's facts will determine whether or not a sale or purchase of software is taxable; but, the bottom line is if software is downloaded electronically it is not subject to Florida sales tax.
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