67-6-231 - Retail sale, lease, licensing or use of computer software. - Tennessee Statutes

67-6-231. Retail sale, lease, licensing or use of computer software.

(a)  The retail sale, lease, licensing or use of computer software in this state, including prewritten and custom computer software, shall be subject to the tax levied by this chapter, regardless of whether the software is delivered electronically, delivered by use of tangible storage media, loaded or programmed into a computer, created on the premises of the consumer or otherwise provided. The tax shall be levied on the sales price or purchase price of the computer software at a rate equal to the rate of tax levied on the sale of tangible personal property at retail by § 67-6-202.

(b)  (1)  The retail sale of, use of or subscription to a computer software maintenance contract shall be subject to the tax levied by this chapter. The tax shall be levied on the sales price or purchase price of the computer software maintenance contract at a rate equal to the rate of tax levied on the sale of tangible personal property at retail by § 67-6-202. Computer software maintenance contracts shall be subject to tax in this state when:

          (A)  The computer software maintenance contract is sold as part of or in connection with a sale of computer software that is subject to the tax levied by this chapter;

          (B)  The computer software maintenance contract applies to computer software installed on computers located in this state. If a computer software maintenance contract applies to computer software installed on computers both in this state and outside this state, dealers or users may allocate to this state a percentage of the sales price or purchase price of the computer software maintenance contract that equals the percentage of computer software installed on computers located in this state; or

          (C)  The location of the computer software covered by the computer software maintenance contract is not known to the seller but the purchaser's residential street address or primary business address is in this state.

     (2)  No additional tax shall be due under this chapter on any repairs, modifications, updates or upgrades provided pursuant to a computer software maintenance contract that is subject to tax under this subsection (b), unless the seller makes an additional charge for the repairs, modifications, updates or upgrades.

[Acts 2003, ch. 357, § 38; 2004, ch. 959, §§ 61, 68; 2005, ch. 311, §§ 1, 2;  2007, ch. 602, §§ 51, 86; 2009, ch. 530, § 52.]