NAC372.880. Applicability of tax to prewritten computer software and computer software maintenance contracts.

     1. Unless it is delivered electronically or by load and leave, prewritten computer software is tangible personal property. The tax applies to:

     (a) The sale, lease, rental or licensing for use of such prewritten computer software.

     (b) A mandatory computer software maintenance contract for such prewritten computer software.

     (c) An optional computer software maintenance contract for such prewritten computer software which obligates the vendor to provide future updates or upgrades to the prewritten computer software. Except as otherwise provided in subsection 2, the tax does not apply to an optional computer software maintenance contract for such prewritten computer software which only obligates the vendor to provide support services.

     2. If an optional computer software maintenance contract is part of a bundled transaction which includes both taxable and nontaxable or exempt products that are not separately itemized on the invoice or similar billing document, the tax applies to the entire transaction.

     3. For the purposes of this section:

     (a) “Bundled transaction” has the meaning ascribed to it in NAC 372.045.

     (b) “Computer software maintenance contract” means a contract that obligates a vendor of prewritten computer software to provide a customer with future updates or upgrades to prewritten computer software, support services with respect to prewritten computer software, or both.

     (c) “Mandatory computer software maintenance contract” means a computer software maintenance contract that a customer is obligated by contract to purchase as a condition to the retail sale of prewritten computer software.

     (d) “Optional computer software maintenance contract” means a computer software maintenance contract that a customer is not obligated to purchase as a condition to the retail sale of prewritten computer software.

     (Added to NAC by Tax Comm’n, eff. 9-30-88; A by R021-08, 4-17-2008; R104-09, 11-25-2009)