The Michigan Department of Treasury issued Revenue Administration Bulletin (RAB) 2023-10 to update guidance with respect to the taxation of computer software and digital goods. The RAB provides detailed guidance with respect to the taxability of prewritten computer software.
The taxable nature of these purchases will depend upon many factors including:
- Whether or not the transaction constitutes a purchase of tangible personal property or a service,
- Whether or not the consumer exercises of control over the property,
- Whether or not the property was delivered or partially delivered to the consumer, and
- In a single-mixed transaction involving software and services, using a fact intensive inquiry to determine the object of the transaction.
The RAB further discusses the taxability of service maintenance contracts for prewritten computer software, as well as the taxability of digital goods and micro-transactions.
For more information about this topic and other sales and use tax related topics, please contact us at 260-969-2595.