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Texas Comptroller Finds Sales Tax Nexus Through Software Licenses

The Texas Comptroller has affirmed an Administrative Law Judge (ALJ) decision that a software company is required to collect and remit sales and use tax on its sales of software licenses to Texas customers. The ALJ found that the presence of software in Texas constituted nexus because the company owned tangible personal property in Texas (although the software was licensed to other entities in Texas). The ALJ then determined that the nexus was substantial because of the amount of fees generated by the tangible personal property in the state.

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