In a regular meeting with a client relationship, the client (CFO) informed us that the company planned to close on the purchase of a large software package. We inquired as to whether the client would be paying sales tax on the software in Georgia. ‘Yes, we are. We looked at it, and it appears the software is taxable, and the vendor agrees and plans to collect it’. The tax in this instance was $270,000. We understood that in Georgia, if software is purchased and delivered electronically (via internet download or delivery electronically), with no tangible medium, the transaction is not subject to Georgia sales tax. That evening we were on the phone with the software vendor, and were successful in modifying the contract for sale and delivery terms. The client saved $270,000 in sales tax, a tax the company would have otherwise been forced to pay.
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