Arkansas Code § 26-52-304 - Tax Levied on Sales of Computer Software and Maintenance of Computer Hardware

(a) The excise tax levied by this chapter and by any act supplemental thereto, is levied on gross receipts or gross proceeds received from the following:

(1) (A) Sales of computer software, including prewritten computer software, which shall be taxed as sales of tangible personal property.

(B) As used in this section:

(i) "Computer" means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions;

(ii) (a) "Computer software" means a set of coded instructions designed to cause a computer or automatic data processing equipment to perform a task.

(b) "Computer software" does not include software that is delivered electronically or by load and leave;

(iii) "Computer software maintenance contract" means a contract that obligates a vendor of computer software to provide a customer with future updates or upgrades to computer software or support services with respect to computer software, or both;

(iv) "Delivered electronically" means delivered to the purchaser by means other than tangible storage media;

(v) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities;

(vi) "Load and leave" means delivery to the purchaser by use of a tangible storage media in which the tangible storage media is not physically transferred to the purchaser; and

(vii) "Prewritten computer software" means computer software, including prewritten upgrades, that is not designed and developed by the author or other creator to the specifications of a specific purchaser; and

(2) Service of repairing or maintaining computer equipment or hardware in any form.

(b) The gross receipts or gross proceeds derived from the sale of a computer software maintenance contract are not taxable.

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Last modified: November 15, 2016