Computer software is a general term used to describe a collection of computer programs, procedures and documentation that perform some tasks on a computer system. Software is considered personal property and may be assigned.
Computer software is a general term used to describe a collection of computer programs, procedures and documentation that perform some tasks on a computer system. Software is considered personal property and may be assigned.
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In general, SaaS is considered a non-tangible service; therefore, it is not subject to sales tax at the state level in Colorado. But Colorado has home-rule jurisdictions, which means that local cities can establish their sales tax regulations, which could result in independent taxation rules concerning SaaS.
California generally does not require sales tax on Software-as-a-Service.
Prewritten computer software delivered on storage media such as a diskette is generally subject to states' sales taxes. However, some states do not impose sales tax on prewritten computer software if it is downloaded electronically.
Colorado sales tax applies to a sale of computer software if all of the following conditions are met: (1) it is prepackaged for repeated sale or license; (2) its use is governed by a tear-open nonnegotiable license agreement; and (3) it is delivered in a physical medium such as a tape, disk, compact disc, or card.
Generally, sales of computer hardware and canned or prewritten computer software are subject to Colorado sales and use tax while sales of custom software and computer services are exempt.
The retail sale of computer software is subject to the City of Boulder sales/use tax unless the cost of modification of the software is greater than 25 percent of the price of the unmodified software. Therefore, custom made software is exempt from sales/use tax.
The Denver Revised Municipal Code (DRMC) imposes sales or use tax on the purchase price for software programs, software as a service, software license fees, and software maintenance agreements (collectively referred to in this tax guide as ?software?).
Taxation Exceptions Farm equipment. Food for home consumption. Food sold through vending machines. Gas, electricity or other similar resources for residential use. Low-emitting vehicles. Machinery and machine tools (as defined on form DR 1191) Occasional sales by charitable organizations. Pesticides.