Question

We are often asked to explain if/why Cyrious support services are taxable. This WIKI page attempts to do that and gather the reasoning in one place.

Answer

Taxability of technical support is governed by several considerations. These include:
  • Where Cyrious has Nexus.
  • The tax laws of the country/state you are in.
  • Whether you are purchasing support by itself or with a new purchase.
  • Whether you own the software or are subscribing to it.

Nexus

Cyrious has Nexus to collect sales tax in the following US states.
  • Florida
  • Louisiana
  • Michigan
  • Texas

Note: If you live outside of these US states, you may still owe taxes to your government but Cyrious does not collect them. Ask your accountant for the proper handling.

Florida


Louisiana


Michigan


Cyrious Technical Support services in Michigan are taxable because:
  • The product is prewritten, not custom software written just for one company.
  • The service includes updates.

For information about tax treatment refer to the Michigan Taxability Matrix. The relevant classification is:
  • Tax Reference Number: 30400
  • Description: Optional computer software maintenance contracts with respect to prewritten computer software that provide updates or upgrades and support services to the software
  • Taxable Amount: 100%
  • Statute/Rule Citation/Comment: UTA: MCL 205.92(k) and 205.93; STA: MCL 205.51a(q) and 205.52(1)

Texas


For information about tax treatment refer to the Nov 2010 Controller Newsletter and Texas Tax Code Section 151.0101(a)(5)(D). Cyrious Technical Support services in Texas are taxable because:
  • In Texas, software maintenance (e.g., error correction, improvements or technical support) is taxable when provided by the seller of the software.

See Also


Update: