A company’s sale of computer software, which provides customers the access to computer generated fill-in and functional forms as well as the ability to complete the forms, is subject to New York sales and use tax, regardless if delivered in a compact disc form or through a direct Internet connection. Since the software is not designed and developed to the specifications of a specific user, it is considered prewritten software, which is taxable. Computer system hardware that is used directly and predominantly (more than 50% of the use) in the design and development of software products for sale is exempt from sales and use tax under section 1115(a)(35) of the Tax Law. Therefore, computer system hardware purchased or leased by the company which is used or consumed directly and predominantly in designing or developing these products qualifies for the exemption. (TSB-A-08(40)S, New York Commissioner of Taxation and Finance, August 28, 2008)