Prewritten computer software

From the 2024 DOR Tax Exemption Study

84.40.037 - Prewritten computer software Description Computer software, except embedded software, is subject to property tax on 100% of the purchase price in the first year following purchase and on 50% of the cost in the second year. Thereafter, it is exempt from property tax. Purpose Recognizes the rapid obsolescence of software and the difficulty of establishing accurate depreciation schedules for the myriad of software programs. Also, it helps provide uniformity of taxation throughout the state. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes Indeterminate Indeterminate Indeterminate Indeterminate Local Taxes Indeterminate Indeterminate Indeterminate Indeterminate Repeal of Repealing a property tax exemption would not increase state revenues. A repeal exemption shifts the state property tax to the currently exempt taxpayers and reduces the tax burden of other taxpayers. It may decrease the local rate and possibly result in local taxing districts at their statutory maximum rate experiencing a revenue increase. Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.000 $0.000 $0.000 Local Taxes