Tax Law Updates | New Proposed Regulations
February 19, 2009
California FTB Seeks to Revise Sales and Use Tax Regulation on Computer Programs
Proposed Amendments to Regulation 1502
Regulation 1502, 1/23/2009
The California Franchise Tax Board (“FTB”) seeks to amend regulation pertaining to sale and use tax. Specifically, the FTB’s proposed regulation clarifies the definition of the term “program” as it relates to computers and data processing.
Under the proposal, the FTB defines the term as “the complete plan for the solution of a problem, i.e., the complete sequence of automatic data processing equipment instructions necessary to solve a problem, and includes both systems and application programs and subdivisions thereof.”
The FTB defined the term “Problem” as the “means and includes any problem that may be addressed or resolved by a program…
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