On April 4, 2017, the Pennsylvania Department of Revenue (“DOR”) issued the revised sales and use tax letter ruling (“letter ruling”), “SUT-17-001 — Act 84 of 2016 – Support to Canned Computer Software and Other Digital Property.” The letter ruling results from newly enacted legislation in 2016 and explains to what extent support services for canned computer software and/or other digital property is subject to sales and use tax. Pennsylvania’s policy of subjecting these types of support services to sales and use tax differs from the prevailing treatment in other states. Taxpayers purchasing these types of services should review invoices and associated contracts to ensure tax is being paid/accrued correctly.
In Pennsylvania, sales and use tax is imposed at a rate of six percent “upon the purchase price of each separate sale at retail or use of tangible personal property and certain selected services within this Commonwealth.” In Pennsylvania “tangible personal property” is defined in 72 Pa. Cons Stat. §7201(m). Act 84 of 2016 updated the definition of “tangible personal property” to specifically include:
The items listed above are “tangible personal property” whether the items were electronically or digitally delivered, streamed or accessed and whether purchased as a single item, by subscription or in any other manner. The definition of “tangible personal property” also includes the maintenance, updates and support associated with the items listed above.
The original letter ruling requested the DOR’s interpretation of what is included in the definition of the term “support.” In the revised letter ruling, the DOR further clarified its policies around what it considers be “support.”
The DOR considers “support” to mean “providing of advice or guidance concerning otherwise taxable digital or electronic tangible personal property. This includes identifying the source of problems affecting the usability of the property and/or attempting to place the property in or restore the property to a useable state. This includes, but is not limited to what is commonly referred to as help desk support or call center support. The support may be delivered verbally, online, or through automated means that reside on customer’s device or by human means. The support may be delivered by the property vendor or a third party support provider who may or may not have remote access to the customer’s device.”
It should be noted that while training is specifically excluded from the definition of support, certain types of consulting could meet the established definition and be considered taxable.
 72 Pa. Cons. Stat. § 7202
 72 Pa. Cons. Stat. § 7201(m)(2)