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Example 3: A business in Massachusetts purchases an enterprise license that allows the

purchaser to make copies of software (either from a master disk or downloaded copy) and those

copies will be concurrently available for use at the purchaser’s business locations in various

jurisdictions. The purchaser gives the seller a properly completed MPU form. For sales/use tax

purposes, part of the sales price will be apportioned to the other states where the purchaser is

using copies of the software.

A Multiple Points of Use Certificate may not be used for computer software received in person by

a business purchaser at a business location of the seller, such as a retail store. A Multiple Points

of Use Certificate also may not be used for software that is loaded on computer hardware prior to

sale; in that situation the sales tax sourcing rules for computer hardware determine the taxability

of the transaction, regardless of whether the price for the hardware and software are separately

stated.

In accordance with the authority in St. 2005, c. 163, § 34, the Department will promulgate

regulations on Multiple Points of Use Certificates and apportionment of sales or use tax to other

jurisdictions.

V. Treatment of Corporations as Engaged in Manufacturing Activity:

St. 2005, c. 163, §§ 27, 29 also amend G.L. c. 63, §§ 38C, 42B to provide that for purposes of

those provisions and G.L. c. 63, § 38, the development and sale of standardized computer

software shall be considered a manufacturing activity, without regard to the manner of delivery of

the software to the customer. These changes are effective for taxable years beginning on or after

January 1, 2006.

A corporation classified as a manufacturing corporation may use certain tax benefits outlined in

830 CMR 58.2.1(4). In addition, a corporation engaged in manufacturing but not having been so

classified may qualify for certain tax benefits described in 830 CMR 58.2.1(5). A corporation

engaged in manufacturing activity may also be subject to single sales factor income

apportionment for the corporate excise as provided by G.L. c. 63, § 38(l). Previously, corporations

engaged in the development and sales of prewritten software could only be treated as engaged in

manufacturing to the extent that software was delivered in a tangible medium.

/s/ Alan LeBovidge

Alan LeBovidge

Commissioner of Revenue

AL:MTF:jt

February 10, 2006

TIR 05-15

[1]

Prewritten software was called “canned software” in some of the Department’s prior public

written statements.

[2]

With respect to maintenance contracts sold before April 1, 2006, software vendors are

required to collect tax on invoices after April 1, 2006. For example, if a multiple year contract

that began in June, 2005 has payments due in June, 2006 and June, 2007, the vendor must

collect applicable tax on the payments due in June, 2006 and 2007.

Instructions For Form Tir 05-15 - Transfers Of Prewritten Computer Software Sales And Use Tax Page 3