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California SBE issues guidance on sales tax treatment of technology transfer agreements

The California State Board of Equalization (SBE) has issued guidance on the California Court of Appeal’s decision in Lucent Technologies Inc. v. Board of Equalization and the sales tax treatment of technology transfer agreements (TTAs). In Lucent, the Court held that the taxpayer’s charges for software on storage media as part of a TTA were not subject to sales tax. The SBE recently has issued a special notice that explains TTAs, the Lucent decision, efforts to amend the relevant sales and use tax regulations, and potential refund opportunities.

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