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Texas ALJ holds software delivered to Texas is taxable use

A Texas Comptroller Administrative Law Judge on July 2 denied a taxpayer’s refund request for a multistate exemption on the purchase of software licenses and software maintenance services. The taxpayer claimed that sales and use tax was erroneously paid on the purchase of software licenses used on computers located outside Texas and software maintenance services that benefited computers located outside Texas. This ruling upholds the Comptroller’s long-standing interpretation of software licenses as tangible personal property, and the policy that a multistate benefit of use exemption is only applicable to certain taxable services that benefit an identifiable segment of the business.

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