Florida Software Maintenance Agreement
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FAQ
Although SaaS is not currently taxable in Florida, other services and products may be. The first step in determining your product's taxability in Florida is to identify whether it falls under a taxable category.
Most services are already exempt from Florida sales and use tax. Among the exceptions to that rule are interior nonresidential cleaning services, nonresidential pest control services, and investigative and crime protection services.
In general, computer hardware and canned software are taxable, but custom software and computer services are exempt. Register for a complimentary trial to unlock this document, plus gain access to so much more, including: Expert insights into the industry's hottest topics.
Most repairs are subject to Florida's general state sales tax rate of 6% and any applicable discretionary sales surtax (local option tax). Discretionary sales surtax rates vary by county.
Services in Florida are generally not taxable, with important exceptions: Nonresidential cleaning services. Some labor to real property, including repair labor (fabrication of materials) and labor on commercial and free-standing residential appliances. Communications services.
A software maintenance agreement, or SMA, is a legal contract that obligates the software vendor to provide technical support and updates for an existing software product for their customers. It may also extend the expiration date of certain features, such as new releases or upgrades.
So while the software and other new technologies and services may be exempt, the maintenance of them, regardless of whether such contracts include parts, is taxable in the state of Florida.
