RSM Resources

Tax Tips: Sales and use tax exemptions for computers and software

Many states offer sales and use tax incentives for purchasing computer hardware and software.

Two good examples of technology-related exemptions include:

• Purchasesof computers and certain types of software used in processing orstoring data may qualify for a state sales and use tax exemption ifyour business meets certain eligibility requirements.
• Ifyou’re a buyer of licensed software, you may be able to purchase boththe software and software maintenance exempt from state sales and usetax if certain requirements are met.

Moststates will offer sales and use tax exemptions for purchases ofcomputer hardware if used directly in the manufacturing process.

Ifyour business is aided by technology, chances are that significantopportunities exist to save tax dollars. Be sure to check with yourstate to determine if sales and use tax refunds may be available to youon purchases of technology-related products.