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Sales of custom software - downloaded are exempt from the sales tax in New Jersey. In the state of New Jersey, it is considered to be exempt so long as it was separately stated, reasonable charge for the professionally done service of modifying canned software for a specific customer.
Effective October 1, 2006, information services are subject to New Jersey sales and use tax.
Tangible personal property can include prewritten computer software delivered electronically. In addition, most services performed on tangible personal property and specified digital products are taxable unless they are specifically exempted by law.
A computer software maintenance contract that only provides customer support services is treated as a sale of non-enumerated services and is not subject to sales tax.
INSTALLATION AND MAINTENANCE SERVICES AND SERVICE CONTRACTS They are treated as charges for the installation of tangible personal property. N.J.S.A. B-3(b)(2). The sale of a maintenance contract for prewritten software is generally subject to tax.
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.
Generally, the maintaining, servicing, or repairing of real property is taxable unless the service results in an exempt capital improvement.
Sales of are subject to sales tax in New Jersey. Sales of parts purchased for use in performing service under optional maintenance contracts are exempt from the sales tax in New Jersey.
A computer software maintenance contract that only provides customer support services is treated as a sale of non-enumerated services and is not subject to sales tax.
Grocery, Drug, and Household Items are not subject to Sales Tax. Some items found on the list may become taxable if sold as prepared food.