In response to a taxpayer’s inquiry, the Missouri Department of Revenue issued a private letter ruling detailing the taxability of various computer software charges. The taxpayer’s (an out-of-state corporation) sales of canned computer software were subject to Missouri sales or use tax. The ruling differentiated between the applicability of use tax versus sales tax. Sales of canned software are subject to use tax if the order is taken and approved outside Missouri and the software is shipped by common carrier to clients in Missouri, whereas if the order is taken and approved in Missouri or delivered by the seller in Missouri, the sale is subject to sales tax. The ruling also explained that sales of customized software are exempt from sales or use tax. However, charges for custom work on canned software which the taxpayer purchased and installed for the client are subject to sales or use tax if the custom work makes the software compatible with the customer’s equipment. (Letter Ruling No. LR3759, Missouri Department of Revenue)