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In a recent private letter ruling, the South Carolina Department of Revenue held that software subscription services are tangible personal property subject to sales and use taxes.
Digital goods may be taxed like tangible goods The states that define tangible personal property very broadly to encompass digital goods are: Alabama, Arizona, New Mexico, Utah, and West Virginia. The states that define electronic versions as equivalents of tangible property are: Indiana, Louisiana, Maine, and Texas.
The majority of states which have addressed the issue and have concluded that software (at least unbundled software) is not tangible personal property for ad valorem tax purposes and therefore is generally not taxable.
South Carolina Digital products are not taxable in South Carolina. Digital products are not specifically included in the definition of tangible personal property.
Yes. Charges for maintenance agreements (whether optional or mandatory) that are made in conjunction with, or as part of the sale of, computer software sold and delivered by tangible means are includable in "gross proceeds of sales" or "sales price", and, therefore, subject to the tax.
If a business purchases a digital good (only digital goods, NOT digital automated services or remote access software) for business purposes, then the purchase is exempt from sales tax.
Prescription medicines, groceries, and gasoline are all tax-exempt. Some services in South Carolina are subject to sales tax.
In the state of South Carolina, any modifications that are made to canned software that are prepared exclusively for a specific customer are considered to be taxable custom programs, not exempt. Sales of digital products are exempt from the sales tax in South Carolina.
Prescription medicines, groceries, and gasoline are all tax-exempt. Some services in South Carolina are subject to sales tax.