- The term “computer software delivered electronically” refers to software that is transferred or made available to the customer through electronic means, without any physical transfer of tangible media.
- This includes software that is downloaded or delivered via email, but not if it is transferred using tangible property.
- States commonly separate computer software into two categories: custom software and prewritten (aka “canned”) software.
- Custom software is designed and tailored to meet the specific needs of a particular customer, while prewritten software is developed and marketed for general use.
- Each state has its own rules and regulations regarding the taxation of computer software delivered electronically, with some states taxing both custom and prewritten software, while others only tax prewritten software.
- Some states also offer exemptions for certain types of software or certain types of businesses.
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