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Requirements for prewritten software are still subject to sales and use tax regardless of the method of delivery (whether with a physical medium, downloadable or accessed via the Internet) or if possession or control is given.
Sales of custom software - delivered on tangible media are exempt from the sales tax in Georgia. Sales of custom software - downloaded are exempt from the sales tax in Georgia.
Georgia exempts sales and use taxes on a wide range of expenditures made by manufacturers. These include purchases of the following if they are integral to the manufacturing process: Machinery and equipment. Repair and replacement parts.
Georgia does not impose sales and use tax on SaaS, cloud-based services or hosting services. Prewritten computer software, delivered either electronically or through load and leave is also not subject to tax in the state, nor are computer related services, including information and data processing services.
While most services are exempt from tax, Georgia does tax the sale of accommodations, in-state transportation of individuals (e.g., taxis, limos), sales of admissions, and charges for participation in games and amusement activities.
The majority of states which have addressed the issue and have concluded that software (at least unbundled software) is not tangible personal property for ad valorem tax purposes and therefore is generally not taxable.
While most services are exempt from tax, Georgia does tax the sale of accommodations, in-state transportation of individuals (e.g., taxis, limos), sales of admissions, and charges for participation in games and amusement activities.
Sales of digital products are exempt from the sales tax in Georgia.
But, in most, it's a mixed bag. California exempts most software sales but taxes one type: canned software delivered on tangible personal property an actual object you can touch or hold, such as a disc. Nebraska taxes most software sales with the exception of one type: SaaS.
Computer software delivered electronically is not a sale of tangible personal property and therefore is not subject to sales and use tax.