Massachusetts: Sales Tax Handbook
Are Software and Digital Products subject to sales tax?
While Massachusetts' sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of software and digital products in Massachusetts, including canned software - delivered on tangible media, canned software - downloaded, custom software - delivered on tangible media, custom software - downloaded, customization of canned software and digital products. To learn more, see a full list of taxable and tax-exempt items in Massachusetts.
Canned Software - Delivered on Tangible Media
TAXABLE
Sales of canned software - delivered on tangible media are subject to sales tax in Massachusetts.
Canned Software - Downloaded
TAXABLE
Sales of canned software - downloaded are subject to sales tax in Massachusetts.
Custom Software - Delivered on Tangible Media
EXEMPT
Sales of custom software - delivered on tangible media are exempt from the sales tax in Massachusetts.
Custom Software - Downloaded
EXEMPT
Sales of custom software - downloaded are exempt from the sales tax in Massachusetts.
Customization of Canned Software
EXEMPT
In the state of Massachusetts, all charges for the customization transaction must be separately stated for the exemption to be applicable.
Digital Products
EXEMPT
Sales of digital products are exempt from the sales tax in Massachusetts.
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