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FAQ Articles

Are amounts billed for computer software maintenance agreements subject to sales tax?

The fees for computer software maintenance agreements for prewritten software are subject to tax if the maintenance agreement is mandatory, or if the maintenance agreement is optional but includes computer software updates which are not separately stated.

If the maintenance agreement for prewritten software is optional, includes updates to the software and the update charges are separately stated, the maintenance agreement is not subject to tax but the software updates are subject to tax.

The fees for computer software maintenance agreements are not subject to tax if the software is a custom program.

nd.gov - The Official Portal for North Dakota State Government
North Dakota: Legendary. Follow the trail of legends

Ryan Rauschenberger
Tax Commissioner
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FAQ Articles

Are amounts billed for computer software maintenance agreements subject to sales tax?

The fees for computer software maintenance agreements for prewritten software are subject to tax if the maintenance agreement is mandatory, or if the maintenance agreement is optional but includes computer software updates which are not separately stated.

If the maintenance agreement for prewritten software is optional, includes updates to the software and the update charges are separately stated, the maintenance agreement is not subject to tax but the software updates are subject to tax.

The fees for computer software maintenance agreements are not subject to tax if the software is a custom program.

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