Select excerpts from the Minnesota Department of Revenue publication #134: Sales Tax Fact Sheet Prewritten computer software The sale, lease or license to use a canned or prewritten computer software program is taxable. Custom computer software A custom computer software program is not taxable. A custom program is one that is prepared to the special order of the customer. It generally requires consultation and an analysis of the customer’s requirements. Prewritten computer software with modifications A prewritten computer software program that is modified to meet one specific customer's needs is a custom software program only to the extent of the modifications. The price for the prewritten program is taxable. The price for modifying or adapting the program is not taxable if separately stated on the bill. Other Charges - Installation or set-up ...of prewritten software upgrades is taxable.
- Delivery charges for taxable products are taxable
- Free Software installation charges are taxable.
- Converting data from one physical form to another is taxable
- Converting data from one electronic form to another is not taxable
Web Page Development is not taxable. (The service provider must pay sales or use tax on items purchased to produce the web page.) Maintenance Agreements on Custom Software are not taxable. |