Tennessee § 67-6-231 - Retail sale, lease, licensing or use of computer software.

§ 67-6-231. Retail sale, lease, licensing or use of computer software.

The retail sale, lease, licensing or use of computer software in this state, including prewritten and custom computer software, shall be subject to the tax levied by this chapter, regardless of whether the software is delivered electronically, delivered by use of tangible storage media, loaded or programmed into a computer, created on the premises of the consumer or otherwise provided. The tax shall be levied on the sales price or purchase price of the computer software at a rate equal to the rate of tax levied on the sale of tangible personal property at retail by § 67-6-202. For purposes of subsection (a), “use of computer software” includes the access and use of software that remains in the possession of the dealer who provides the software or in the possession of a third party on behalf of such dealer. If the customer accesses the software from a location in this state as indicated by the residential street address or the primary business address of the customer, such access shall be deemed equivalent to the sale or licensing of the software and electronic delivery of the software for use in this state. If the sales price or purchase price of the software relates to users located both in this state and outside this state as indicated by a residential street or business address, the dealer or customer may allocate to this state a percentage of the sales price or purchase price that equals the percentage of users in this state. Any dealer that purchases computer software only for the purpose of reselling access and use of such software as described in this subsection (b) shall be entitled to purchase such software exempt from the tax imposed by this chapter, subject to the same rules that apply generally to any sale of tangible personal property for resale; provided, however, that software purchased by a qualified data center for access and use by an affiliated company, as defined by § 67-6-395(c), shall be deemed to be used and consumed by the qualified data center and not resold to the affiliated company. Nothing in this subsection (b) shall be construed to impose a tax on any services that are not currently subject to tax under this chapter, such as, but not limited to, information or data processing services, including the capability of the customer to analyze such information or data provided by the dealer; payment or transaction processing services; payroll processing services; billing and collection services; internet access; the storage of data, digital codes, or computer software; or the service of converting, managing, and distributing digital products. Acts 2003, ch. 357, § 38; 2004, ch. 959, §§ 61, 68; 2005, ch. 311, §§ 1, 2; 2007, ch. 602, §§ 51, 86; 2009, ch. 530, § 52; 2015, ch. 273, § 5; 2015, ch. 514, § 22. Compiler's Notes. Acts 2007, ch. 602, § 51 provided that Acts 2003, ch. 357, § 38, as amended by Acts 2004, ch. 959, §§ 61, 68, as amended by Acts 2005, ch. 311, §§ 1, 2, is repealed in its entirety, effective June 28, 2007. For the Preamble to the act concerning the need to modernize the sales and use taxes, franchise and excise taxes and business tax in the state to address the engagement in business within the state by out-of-state companies, see Acts 2015, ch. 514. Acts 2015, ch. 514, § 1 provided that the act shall be known and may be cited as the “Revenue Modernization Act.”