Illinois Software License Agreement

State:
Multi-State
Control #:
US-TC05102
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Word; 
PDF; 
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Description

This is a software license agreement between the developer and the customer, giving the customer the right to use the software. The agreement addressses the restriction of use by the customer, deliveries, fees, payment, and all other areas that are typically parts of such an agreement.

Illinois Software License Agreement is a legal contract that governs the use and distribution of software in the state of Illinois. It outlines the terms and conditions under which the software can be legally used, including the rights and responsibilities of both the software license owner (licensor) and the individual or organization using the software (licensee). This agreement is essential to protect the rights and intellectual property of the software creator. The key elements typically included in an Illinois Software License Agreement are: 1. Grant of License: This section specifies the rights granted by the licensor to the licensee, defining the scope and limitations of use, such as the number of authorized installations, permitted users, and usage restrictions. 2. Intellectual Property Rights: The agreement clearly states that the software and its associated intellectual property rights belong to the licensor. It also ensures that the licensee agrees not to modify, reverse engineer, or distribute the software unless explicitly permitted. 3. Permitted Use: The agreement identifies the authorized purpose for which the software can be used, ensuring that it is employed only for its intended function and not for any illegal or unauthorized activities. 4. Restrictions: This section outlines the limitations imposed on the licensee, such as restrictions on sublicensing, transferring, or selling the software without prior consent from the licensor. 5. Software Updates and Support: It specifies whether the licensor is obligated to provide updates, bug fixes, or customer support to the licensee, and if so, under what conditions and for how long. 6. Termination: The agreement sets forth the circumstances under which either party may terminate the agreement. This usually includes breach of the terms, failure to pay any applicable fees, or violation of copyright laws. 7. Warranty and Liability: The agreement may include disclaimers of all warranties or guarantees, limiting the licensor's liability for any damages arising from the software's use or inability to use it. 8. Confidentiality: This section addresses the obligation of both parties to maintain the confidentiality of any proprietary or sensitive information exchanged during the agreement. It's important to note that while there may not be specific "types" of Illinois Software License Agreements, variations can exist based on individual software products, pricing models (e.g., perpetual licenses, subscription-based licenses), or industry-specific requirements. Additionally, different approaches might be employed for licenses related to open source software versus proprietary software. Overall, an Illinois Software License Agreement serves as a legally binding document that protects the rights and interests of both software creators and users, aiming to ensure fair usage, avoid misuse, and maintain the integrity of intellectual property in software development.

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FAQ

As part of a retail sale, charges for maintenance agreements or warranty contracts are taxable if they are included in the selling price of the tangible personal property but are not taxable if they are sold separately.

Retail sales of canned software (pre-written software) which is intended for general or repeated use, regardless of the form in which it is transmitted, including electronic means (i.e., downloaded), is subject to tax. A license of computer software is not taxable if specific conditions are met. 86 Ill. Adm.

How Does the Chicago Lease Tax Apply to SaaS or Cloud-Based Products? The tax rate for most lease transactions is 9%; however, as of January 1, 2016, the City imposed a lower rate of 5.25% for a nonpossessory computer lease (SaaS or Cloud-Based Products). This was increased on January 1, 2020, to 7.25%.

If the charges for the agreements are included in the selling price of the tangible personal property, those charges are part of the gross receipts of the retail transaction and are subject to tax. In those instances, no tax is incurred on the maintenance services or parts when the repair or servicing is performed.

Generally, sales of ?canned? computer software are taxable retail sales in Illinois. Canned computer software is considered to be tangible personal property regardless of the form in which it is transferred or transmitted, including tape, disc, card, electronic means, or other media.

Services in Illinois are generally not taxable. However, if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.

The IDOR notes that software maintenance agreements are not taxable if the agreements for the maintenance of tangible personal property are sold separately from the tangible personal property.

Some goods are exempt from sales tax under Illinois law. Examples include fuel for international flights, gold bullion issued by qualifying governments, and newspapers and magazines.

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More info

Oct 19, 2022 — This letter discusses the taxability of computer software licenses and maintenance agreements. See 86 Ill. Adm. Code 130.1935 and 86 Ill. Adm. Feb 4, 2019 — However, the Order Form does not contain the full and complete terms of the software licensing agreement. The full terms and conditions are ...eForm used to request a new Software License or Data Use Agreement, or a modification to an existing agreement. ... © University of Illinois at Urbana-Champaign May 15, 2018 — (E) The customer must destroy or return all copies of the software to the licensor at the end of the license period. This provision is deemed to ... 1) A license of software is not a taxable retail sale if: A) it is evidenced by a written agreement signed by the licensor and the customer; B) it restricts the ... How to fill out Illinois Trial Use License Agreement Of Computer Software Program? · Find the form you want and ensure it is for the proper area/state. · Make use ... This form is a Trial Software License. The license provides that the software is licensed as is and the licensor makes no warranties, express or implied. All parts of the information must be understood and agreed to as part of completing the form. Completion of the form is required before software access is ... Mar 20, 2023 — The IDOR notes that software maintenance agreements are not taxable if the agreements for the maintenance of tangible personal property are sold ... Dec 2, 2022 — Our FOREIGN company COMPANY is seeking clarification of the issue which digital goods are taxable with sales tax in Illinois. Our company would ...

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Illinois Software License Agreement