Taxing Technology Services

If you sell or buy technology services, you need to know the proper way to distinguish the different services you are providing so you aren’t creating a tax obligation unnecessarily or incorrectly classifying your services for sales tax purposes.

Sales tax issues can come into play from the moment a customer engages you for your services. For example, let’s say you sell software, and you have to customize the software to meet the needs of a new customer. You need to know if custom programming (which is a service) will impact the taxability of the sale as opposed to simply selling your software without customization. You also need to determine if the level of effort you will provide is considered a customization of the software.

The nature of your technology services and whether or not your services can be separated from the technology product can also have an impact on a sale’s taxability and raise important questions. Is your technology product usable without your configuration services upon delivery? Are the modification services you provide to existing technology products subject to tax?

This webinar will address these and other critical sales tax issues for technology services, including sales tax implications for managed IT services, how to approach product and service bundling for sales tax, and how training services can be taxed.

We’ll also cover practical issues such as contract and invoice language, documentation of delivery method, sourcing rules, and tricky user allocation issues.

Your Teaching Staff

In this 90-minute live webinar, sales tax expert Diane Yetter of the Sales Tax Institute, will teach you the different ways that technology services can be treated for sales tax purposes. You’ll learn how to set up internal processes and checks that help you get sales tax right no matter the type of technology services you provide. Diane will also present important recent legislative changes regarding taxation of technology services.

And during the live Q&A portion of the webinar, you can get answers to your specific sales tax questions directly from Diane.

Learning Objectives for this webinar include:

• Learn the nuances of the taxation of technology services so you can manage sales tax correctly for these transactions.
• Understand the how the distinctions between configuration vs. installation vs. modification services for software can influence taxability.
• Discover how bundled transactions should be treated for sales and use tax purposes so you can be sure you are charging the correct amount of sales tax and avoiding unnecessary risk.
• Learn how states determine what constitutes custom programming vs. providing a modification of canned software so you can research if there are certain thresholds for sales tax application on a customization service.
• Understand how to document user locations to accurately report the tax as well as how to address this from either a seller or buyer perspective.
• Find out how sales tax can be applied to managed IT services so you can clearly present your services with mapped out tax implications.
• Learn how training services should be treated for sales tax and how to address them on invoices.