The Minnesota Supreme Court has held that sales of customized prewritten software are subject to sales tax as prewritten computer software because the seller did not separately state its charges for the software customization on its customer invoices. When the seller made a sale of the software, it would customize previous versions of its software to meet the customer’s needs. In Minnesota, customized portions of prewritten software are exempt if the taxpayer separately states the charges for customization. The seller failed to separate the prewritten charges from the customization charges on its customer invoices. The court also declined to disregard the form of the sales transactions in favor of their economic substance. The court upheld the assessed late filing and payment penalty because the seller failed to establish that it had reasonable cause to believe that it was not required to file a return or pay the tax. (LumiData, Inc. v. Commissioner of Revenue, Supreme Court of Minnesota, No. A14-0254, September 10, 2014)