Michigan Sales Tax On Software Maintenance Now

If an optional agreement for prewritten software includes future updates or "tangible deliverables" (like new code versions), it may become subject to tax .

Michigan's 6% sales and use tax applies to "tangible personal property," which the state defines to include (canned) computer software. Maintenance agreements follow these specific triggers: Michigan Sales Tax On Software Maintenance

Are you currently reviewing a or trying to determine if a specific SaaS product with a desktop agent is taxable? If an optional agreement for prewritten software includes

Specific charges for technical support or for adapting prewritten software to a user's needs are exempt if they are separately stated and identified on the invoice. Specific charges for technical support or for adapting

If a maintenance agreement is required as part of the purchase of taxable prewritten software and includes future updates or enhancements, the entire cost is generally taxable . Optional Agreements:

Out-of-state vendors must collect tax if they have a physical presence or meet economic thresholds ($100,000 in annual sales or 200+ transactions in Michigan).

When claiming an exemption, ensure Michigan Form 3372 (Sales and Use Tax Certificate of Exemption) is correctly executed.