The New York Department of Taxation and Finance issued a reminder regarding a sales tax exemption available to software and web devs/designers on the purchase of computer hardware. In general, no state or local sales tax will be charged on the purchase of computer hardware when it is used more than 50% of the time to:
- design and develop computer software for sale
- provide website design and development services for sale
- some combination of these two uses
The exempt hardware can be anything from laptops and monitors to external hard drives and accessories.
Design and development services include system analysis, program design, coding, testing, debugging, and documentation activities. The use of computer hardware for administration, production, or distribution activities is not eligible for the exemption.
To claim the exemption, you must provide the hardware seller with a completed Form ST-121.3.
Note: Computer systems that are rented or leased may qualify for the exemption as well.
Have questions? Not sure if you are eligible for this exemption? Let us know, we can help!