The Commonwealth of Pennsylvania Department of Revenue recently shared written guidance on the taxability of Canned Computer Software, Digital Goods, and Related Services. The written guide provides historical details on the definition of a sale at retail, purchase price and the altering or repair of tangible personal property (TPP). Based on the guidance, services performed on TPP are considered taxable even when no TPP is transferred.
Act 84 of 2016 amended the Tax Reform Code to include canned software, applications (apps), games, and satellite radio services, among other items, to be included in the definition of TPP. Services such as configuring, testing, modifying, and programming performed to any of the above listed items are considered taxable services, as they are considered services on TPP. It is important to note that these services are considered taxable when performed on any TPP, regardless of whether the service is in conjunction with the sale of the TPP or separately.
Additional details on the guidance provided by the state can be found on the Commonwealth of Pennsylvania Department of Revenue Website. (Taxability of Canned Computer Software, Digital Goods, and Related Services, Commonwealth of Pennsylvania Department of Revenue Website)