Tax Type
Retail Sales and Use Tax
Description
Computer software dealer
Topic
Accounting Periods and Methods
Appropriateness of Audit Methodology
Date Issued
12-20-1982
December 20, 1982
Re: § 58-1118 Application/1979-82 Sales and Use Taxes
Dear ******************
This is in response to your letter of November 8, 1982 applying for relief from a sales and use tax assessment made for the audit period August 1, 1979, through April 30, 1982.
FACTS
Of a total assessment for $ *********** resulting from nontaxed purchases and nontaxed sales and rentals, **************** is contesting $***************assessed in tax and interest on purchases of $ ******** in computer software. The remainder of the assessment has been paid. ********** employed a Virginia software dealer to provide programs in the form of disks for their computer. The contractual agreement between the seller and the purchaser was that ********* would, for a fee, utilize the disk but not own them.
DETERMINATION
Virginia Code § 58-441.2(b) defines "sale" as: "any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property and any rendition of a taxable service for a consideration." The transfer of possession, even without transfer of title, of computer programs in the form of disks, diskettes, punched tapes, and cards is the transfer of tangible personal property within the statutory definition of a "sale." Furthermore, a "lease" is specifically included within the definition. The sales tax applies to the total charge made to the customer for the software, including any services made in connection with the sales which are taxable under § 58-441.3(b). Since the information available for my determination is that your purchases involved computer software in the form of disks, the purchases must beheld taxable and the assessment upheld. Tax and interest of $ ************** is, therefore, due and payable.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner