Ordinance 2582-02 - Laserfiche WebLink

(6) "Software" means any information, program, or routine, or any set of one (1) or more programs, routines, or collections of information used, or intended for use, to convey information that causes one or more computers or pieces of computer-related peripheral equipment, or any combination thereof, to perform a task or set of tasks. "Software" includes the associated documentation, materials, or ingredients regardless of the media upon which that documentation is provided, that describes the code and its use, operation, and maintenance and that typically is delivered with the code to the consumer. All software is classified as either canned or custom. A software program is intangible property that may be delivered to consumers via tangible or intangible media. It is intended that the taxation of the development, production, and licensing of software programs not be determined by the method by which they are delivered, whether by tangible media or electronically. The model ordinance classifies software development,production, and licensing for tax purposes on the basis of whether the program was developed for the mass market or at the behest of a particular customer. Software is defined as either "custom" or "canned" regardless of the method of delivery. It is intended that the production and licensing of software programs developed and produced for the mass market (canned software)be taxed as if they were tangible personal property. Those programs shall be so taxed even if they are delivered electronically, or licensed for use to more than one person. The development of the canned software program is taxed under the manufacturing classification. (.030B Definition of manufacturer, to manufacture(2)(b)). If the program developed in one jurisdiction is shipped outside the jurisdiction for further manufacturing, for example, to be duplicated or packaged, without prior sale, then the same rules apply to determine the program's value in the jurisdiction in which it was developed as apply to any other product that is partially manufactured in one jurisdiction and finished in another jurisdiction. (.030C Definition of value of products, how determined (2)). Gross receipts from the licensing of a"canned" program are also taxed under the retailing or wholesaling classification. (.030C Definition of sale at retail, retail sale(2)(h); .030C Definition of sale at wholesale, wholesale sale). Even though manufacturing is defined to include the production of custom-made goods, (.030B Definition of manufacturer, to manufacture(2)(a)), it is not the intent of this ordinance to tax the development production, and licensing of custom software as manufacturing. The development, production, and licensing of"custom software" is taxed as the production and licensing of intangible property under the general business classification, regardless of whether such software is sent outside the jurisdiction in which it is developed for duplication or packaging onto tangible medium. (.050(7)). "Taxpayer." "Taxpayer" means any "person", as herein defined, required to have a business license under this chapter or liable for the collection of any tax or fee under this chapter, or who engages in any business or who performs any act for which a tax or fee is imposed by this chapter. "Taxpayer" does not mean the United States, or any instrumentality thereof, the state of Washington, or any of its political subdivisions or any county or municipality. 15