Oklahoma Software Maintenance Agreement - Alternate
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FAQ
Oklahoma does not tax any cloud, SaaS, or digital products. Generally speaking, the state only taxes physical goods and limited, explicitly enumerated services.
By statute, Oklahoma law exempts from sales tax prewritten software delivered to a customer electronically. Oklahoma's regulations provide that this exemption includes optional software maintenance contracts under which prewritten upgrades are delivered to customers by means other than tangible storage media.
California imposes a 7.25% state sales and use tax on all taxable SaaS and tangible software. In most areas of California, local jurisdictions have added district taxes that increase the tax owed by a seller. Those district tax rates range from 0.10% to 1.00%. Some areas may have more than one district tax in effect.
Services in Oklahoma are generally not taxable. However ? if the service you provide includes creating or manufacturing a product for sale, you may have to deal with the sales tax on products.
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.
In addition, maintenance charges are not taxable. Software purchased with a computer. The charge for prewritten computer software purchased with a computer is subject to tax. If a computer is bought with custom software and the cost for the software is not separately stated, the entire purchase price is subject to tax.