[IanDrake]

I live in Mass, but my consulting company is in CT. My current client is in MA and I do some work for them on site.

I read the law and best I can tell, I don't qualify for this. It seems to be centered around "pre-written" packaged software. I'm writing it right now, so how can it be "pre-written"?

I won't pay this tax until I hear a valid argument that doesn't start with "Well, to be safe...". I'm not paying the state protection money to be safe from vagueness of their laws.

[loumf]

If you are writing totally custom software, you are exempt (IANL -- but, it's pretty clear in the FAQ). If you customize pre-written software, you might have to collect/report tax (that's where it's vague what customize exactly means).

Using a library isn't customizing, according to the FAQ -- as long as the work done to use it is < 10% of the total project. So, if you take 5 months to write an iPhone App, then you need some library, and you download it and add it to your project in 2 days, you are ok. If you were worried, you could line-item it out and charge tax on just that work.

[randomdata]

iPhone development, and application development in general, essentially is near 100% interfacing with libraries though. Even if you can add a new library to your project in two days, that work most certainly will be to tie the new library to the existing libraries that you have been building upon from the start (the iOS SDK, in this instance), and thus that work would theoretically still not be exempt.

Sounds like a complicated mess.

[loumf]

Interfacing with iOS frameworks is exempt. It's the third-party (not you, not the OS), pre-written software that matters.

My experience is that that is no where near 10% of the work. If it is for your specific custom app, you should line-item the work out.

In this case, if you are audited, they said they are looking for a "good-faith" estimate -- your source-code repository and history of checkins are a journal of this that is much better than anyone would ever have. I would recommend keeping the integration somewhat isolated so that it can easily be compared to the whole.

If you are using PhoneGap or some other application framework, then as the law is written, I think the whole thing is taxable. I think there is a good chance that this part may be amended -- if you are in MA, please write the DOR about this case (I already have).

Email [e-mail] -- just set up the situation and ask the question -- they will use it pretty much verbatim in their FAQ.