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Pennsylvania: Department of Revenue addresses sales and use tax issues

In a February 9, 2017, Pennsylvania Department of Revenue (Department) Sales and Use Tax Letter Ruling (Ruling), the Department clarified its position on the extent to which the state’s sales and use tax applies to support services for canned computer software. The Department ultimately concluded that all support services are subject to the tax when they are “transferred in a sale at retail or made use of after being obtained in a purchase at retail.”
In its discussion, the Department first noted that Pennsylvania’s 6 percent tax applies to the retail sale, or use of, tangible personal property, and some services. Included in the definition of “sale” is the granting of a license to use or consume the property, regardless of the means of the transfer, and regardless of whether the granting of the license is absolute or conditional.