Michigan Sales Tax On Software Maintenance Apr 2026

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'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: Michigan Sales Tax On Software Maintenance

If an optional agreement for prewritten software includes future updates or "tangible deliverables" (like new code versions), it may become subject to tax . Software delivered via physical media or downloaded in

Agreements that strictly provide services like troubleshooting, technical assistance, or helpdesk access are generally exempt from tax. Maintenance agreements follow these specific triggers: If an

Maintenance contracts for custom software (designed for a specific user's needs) are generally considered non-taxable services. Critical Factors and Exemptions

Always break out installation, support, and training charges from the software license fee to preserve exemptions.

When claiming an exemption, ensure Michigan Form 3372 (Sales and Use Tax Certificate of Exemption) is correctly executed.