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Utah law applies sales tax to any product delivered electronically that is taxable if delivered by any other means. States Not Affirmatively Applying Sales Taxes to Digital Goods.
Sales and use tax does not apply to SaaS, which California defines as, A customer gains access to software on a remote network without receiving a copy of the software, while the seller retains exclusive possession and control of it. While California has not specifically codified the SaaS revenue stream, the state
Prewritten computer software is taxable as tangible personal property, whether it is sold as part of a package or as a separate component, regardless of how the software is conveyed to the purchaser.
Sales, rentals, leases and charges for using prewritten software in Utah are taxable regardless of delivery method (boxed, hosted, downloaded, etc.). Charges to upgrade prewritten software are also taxable.
Sales of canned software - delivered on tangible media are subject to sales tax in Utah. Sales of canned software - downloaded are subject to sales tax in Utah. Sales of custom software - delivered on tangible media are exempt from the sales tax in Utah.
Ideally, all software purchases should be taxable to final users and exempt for business users. Instead, states tax some kinds of software and exempt others, based on whether it is customized or off-the-shelf and whether it is on CD or downloaded, all silly distinctions for tax purposes.
Sales, rentals, leases and charges for using prewritten software in Utah are taxable regardless of delivery method (boxed, hosted, downloaded, etc.). Charges to upgrade prewritten software are also taxable.
California: SaaS is not a taxable service. However, software or information that is delivered electronically is exempt. The ability to access software from a remote network or location is exempt. Under California sales and use tax law, there must be a transfer of TPP, in order to have a taxable event.
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.
Utah law applies sales tax to any product delivered electronically that is taxable if delivered by any other means. States Not Affirmatively Applying Sales Taxes to Digital Goods.