When claiming an exemption, ensure Michigan Form 3372 (Sales and Use Tax Certificate of Exemption) is correctly executed.
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 .
When a transaction includes both taxable software and exempt services, Michigan uses this test to determine if the primary "object" of the sale is a service or a product. If the software is merely incidental to a professional service, the whole transaction may be exempt. Compliance Tips To protect against audit risks, businesses should: Michigan Sales Tax On Software Maintenance
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
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: When claiming an exemption, ensure Michigan Form 3372
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.
Are you currently reviewing a or trying to determine if a specific SaaS product with a desktop agent is taxable? When a transaction includes both taxable software and
Agreements that strictly provide services like troubleshooting, technical assistance, or helpdesk access are generally exempt from tax.