Who Owns the Software and Software Tools Undergirding Digital Ads?

Is Your Software Subject to New York Sales Tax?

Companies are increasingly paying for Software as a Service (“SaaS”), whereby a software provider licenses an application to its customers for use as a service on demand.  Under this model of software deployment, a company receives the license to access and use a provider’s software (typically housed on the provider’s servers) for the company’s own business purposes in exchange for a fee. Companies that provide or make use of SaaS in New York should be aware of a recent line of tax opinions finding that licensing fees are subject to New York State sales tax.

Most recently, the New York Commissioner of Taxation and Finance (“Commissioner”) issued an “advisory opinion” stating that the sale of computer software to the NFL was subject to sales tax under New York’s Tax Law. The Commissioner issued the advisory opinion in response to a request by the NFL. Read more »