Are you currently reviewing a or trying to determine if a specific SaaS product with a desktop agent is taxable?
Agreements that strictly provide services like troubleshooting, technical assistance, or helpdesk access are generally exempt from tax.
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 . Michigan Sales Tax On Software Maintenance
Michigan's 6% sales and use tax applies to "tangible personal property," which the state defines to include (canned) computer software. Maintenance agreements follow these specific triggers:
In Michigan , the taxability of software maintenance agreements depends heavily on whether the contract is or optional , and the nature of the software it supports. Key Taxability Rules for Maintenance Are you currently reviewing a or trying to
Maintenance contracts for custom software (designed for a specific user's needs) are generally considered non-taxable services. Critical Factors and Exemptions
If an optional agreement for prewritten software includes future updates or "tangible deliverables" (like new code versions), it may become subject to tax . Conversely, Software as a Service (SaaS) accessed purely
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.