New York: Sales Tax Handbook
Are Software and Digital Products subject to sales tax?
While New York's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of software and digital products in New York, including canned software - delivered on tangible media, canned software - downloaded, custom software - delivered on tangible media, custom software - downloaded, customization of canned software and digital products. To learn more, see a full list of taxable and tax-exempt items in New York.
Canned Software - Delivered on Tangible Media
TAXABLE
Sales of canned software - delivered on tangible media are subject to sales tax in New York.
Canned Software - Downloaded
TAXABLE
Sales of canned software - downloaded are subject to sales tax in New York.
Custom Software - Delivered on Tangible Media
EXEMPT
Sales of custom software - delivered on tangible media are exempt from the sales tax in New York.
Custom Software - Downloaded
EXEMPT
Sales of custom software - downloaded are exempt from the sales tax in New York.
Customization of Canned Software
TAXABLE
In the state of New York, any reasonable, separately stated charges for any modifications which have been applied to canned software which was prepared exclusively for a specific customer is exempt only to extent of their modification. All modified software can be exempt if used directly and predominantly in the production of property for sale or for research and development.
Digital Products
EXEMPT
In the state of New York, some e-books are considered to be exempt if they meet certain standards.
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