Are charges for software maintenance taxable?
Virginia law makes a distinction between “custom” and “prewritten” programs which are defined in 4 of VR 630-10-49.2. Charges for maintenance of “custom” computer software programs are not taxable. The application of the tax to maintenance charges for “prewritten” computer software programs is treated in the same manner as computer hardware; see”General Rule” and “Possible Exceptions” answers to Question 8 above. Question 10: Is software taxable? Charges for custom computer software are exempt in all instances. Charges for prewritten computer software are generally taxable, but separately stated charges for the modification of prewritten programs are exempt from taxation. Please refer to the answer to Question 9. For sales of prewritten computer software to telephone utilities, please refer to the “Possible Exceptions” answer for Question 8. Question 11: Is tangible personal property, such as a computer system, taxable? The retail sale, lease or rental of computer hardware or any other
