The Export Disc Corporation
Computer Software And Internet Sales And Licenses
Before the issuance of the Software Regulations, there was uncertainty about the taxation of computer program transactions. Computer programs did not fit traditional tax principles. Computer programs are usually sold pursuant to "license" or "user agreements". A computer program transaction is unlike a sale of a physical object since the value of the program copy far exceeds the value of the physical medium on which it is transferred. Computer programs, in fact are transferred electronically. Often, there is no physical medium at all.
For purposes of determining the applicability of the DISC to computer software exports, two key analyses are often required. First, (1) is the software "export property" for DISC purposes and (2) is the software product's source of income "from without the U.S."? Is the product for use, consumption or sale without the U.S.?
Click here to read full article by Richard S. Lehman, Esq
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UPDATE: The benefits of U.S. Exporting computer software and internet sales and licenses
