To Tax or Not To Tax, that is my question

[notsmartmark]

WA
I develop database programs for school districts. In the past, when I make a sale, I charge and pay state sales tax. Annually, I charge an update fee. This fee is for specialized upgrades to an existing program. Last year I didn’t charge or pay sales tax for districts that received upgrades. Well, you’ll never guess who left a message for me today.

 

[Shay-Pari'e]

Since you did not have a legal question, and your asking everyone to guess...........Let's make it multipal choice.

 

[notsmartmark]

WA
The state says I need to pay state sales tax on a specially developed database program update.
A. Is this legal?
B. Is this a service and is not taxable?
C. Is this in the form of a question, Alex?
D. Are you a wipe?
A, C & D
B, C or D
Or E. None of the above

 

[Shay-Pari'e]

(QUOTE)In the past, when I make a sale, I charge and pay state sales tax. Annually, I charge an update fee. This fee is for specialized upgrades to an existing program. Last year I didn’t charge or pay sales tax for districts that received upgrades. Well, you’ll never guess who left a message for me today.(QUOTE)

Your answer was not in your multipal choice. If you are this dumb, forget it.

 

[Snipes5]

It isn't really a service if it's a product upgrade.

Further, your "labor" is also taxed in the state of WA.

So yes, you should be charging sales tax, because apparently the state is expecting to collect it from you. Unless of course, you are selling to an exempt organization, but those organizations should have the paperwork for that.

 

[notsmartmark]

Illinois does not tax leases of tangible personal property and since a true license of prewritten software is like a lease and does not result in a transfer of title, licenses of prewritten software are excluded from the definition of sale. Currently, the development of custom software is deemed a service and is not taxable.

This is not WA law (I couldn't find anything on WA's site), but it's almost the exact language that my tax man used last year when we talked. He previously advised both ways, but said he would be cautious. I think I probably should have taken a more careful route.


Please note the tears on my reply from Paradise's Snappy comeback.

 

[Snipes5]

Illinois law is COMPLETELY irrelevant.

I'm not sure what your point is in disputing the advice you've been given.