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:
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 . 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
Out-of-state vendors must collect tax if they have a physical presence or meet economic thresholds ($100,000 in annual sales or 200+ transactions in Michigan). In Michigan , the taxability of software maintenance
Are you currently reviewing a or trying to determine if a specific SaaS product with a desktop agent is taxable?
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.
Maintenance contracts for custom software (designed for a specific user's needs) are generally considered non-taxable services. Critical Factors and Exemptions