Software Transactions

# (a)

A license or sale of pre-written software for purposes other than commercial reproduction, or other exploitation of the intellectual property rights, transferred on a tangible medium shall be treated as the sale of tangible personal property, rather than as either the license or sale of intangible property or the performance of a service. In these cases, the receipts shall be in North Carolina as determined under the rules for the sale of tangible personal property set forth under G.S. 105-130.4 and the rules of this Subchapter.

# (b)

In all other cases, the receipts from a license or sale of software shall be assigned to North Carolina as determined otherwise under this Subchapter. This determination shall be based on the facts, and:

# (1)

the development and sale of custom software as set forth in Section .0900 of this Subchapter;

# (2)

the license of a marketing intangible, as set forth in Rule .1102 of this Subchapter;

# (3)

the license of a production intangible, as set forth in Rule .1103 of this Subchapter;

# (4)

the license of intangible property where the substance of the transaction resembles a sale of goods or services, as set forth in Rule .1105 of this Subchapter; or (5) as a sale of intangible property, as set forth in Rule .1201 of this Subchapter.

Last amended: Authority G.S. 105-130.4; S.L. 2016-94; Eff. January 1, 2020 (See S.L. 2019-246, s. 3).

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