By Charles C. Capouet and Andrew D. Appleby
The Indiana Department of Revenue found that software training is not subject to sales and use tax because it does not constitute tangible personal property. The Department audited the taxpayer and assessed additional use tax on its purchase of a software license agreement. Nearly half of the software license agreement’s cost was for remote software training. Following a protest and a hearing, the Department found that the training expenses were not subject to Indiana sales or use tax because: (1) the cost of the training was billed separately from the cost of the software, (2) the training expenses were accounted for separately in the purchaser’s dealings with the vendor, and (3) the cost paid for the training does not represent the purchase of “tangible personal property.” Ind. Letter of Findings No. 04-20140684, Ind. Dep’t of State Revenue (May 27, 2015).