Prewritten computer software

From the 2024 DOR Tax Exemption Study

Det. No. 15-0314, 35 WTD 451 (September 30, 2016) 454 The sale of prewritten computer software to a consumer, regardless of the method of delivery to the end user, is also subject to retail sales tax. RCW 82.04.050(6)(a); Rule 15502(3). Although sales of stand-alone computer software maintenance agreements are generally taxable under the service and other activities B&O tax, this applies only to agreements where all of the services provided qualify under the services and other activities B&O tax classification [RCW 82.04.290; RCW 82.08.190;] Rule 15502(7)(d)(i). That is not the case here. Here, Taxpayer’s sales of tangible personal property accompanied by a service consisting of installation, repair, cleaning, altering, or improving of the hardware or software, are subject to retail sales tax on the entire sale prices, inclusive of tangible personal property consumed in the activity and/or labor and services rendered. RCW 82.04.050(2)(a); [Rule 15502(7)(d)(i)]. Although Taxpayer engaged in the kinds of professional services contemplated under Rule 15502(7)(d)(i), Taxpayer also engaged in activities that are subject to retail sales tax, such as installation of computer hardware and