Michigan Sales Tax On Software Maintenance [TOP · HOW-TO]

Always break out installation, support, and training charges from the software license fee to preserve exemptions.

If an optional agreement for prewritten software includes future updates or "tangible deliverables" (like new code versions), it may become subject to tax .

When claiming an exemption, ensure Michigan Form 3372 (Sales and Use Tax Certificate of Exemption) is correctly executed. Michigan Sales Tax On Software Maintenance

Specific charges for technical support or for adapting prewritten software to a user's needs are exempt if they are separately stated and identified on the invoice.

Out-of-state vendors must collect tax if they have a physical presence or meet economic thresholds ($100,000 in annual sales or 200+ transactions in Michigan). Always break out installation, support, and training charges

If a maintenance agreement is required as part of the purchase of taxable prewritten software and includes future updates or enhancements, the entire cost is generally taxable . Optional Agreements:

AI responses may include mistakes. For financial advice, consult a professional. Learn more Michigan Sales Tax on Software and Digital Products Specific charges for technical support or for adapting

Software delivered via physical media or downloaded in full is taxable as tangible property. Conversely, Software as a Service (SaaS) accessed purely via a web browser (with no downloaded code) is typically exempt .