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Washington Department of Revenue Seeks Comment on Draft Guidance for MPU Exemption on Software Maintenance Agreements
Summary
The Washington Department of Revenue presented a draft advisory on applying the multiple points‑of‑use (MPU) retail sales tax exemption to bundled software maintenance agreements and invited written comments by Dec. 11, 2024; industry commenters urged more time, clearer rules on when bundles are disqualified, and simpler documentation methods for apportionment.
The Washington State Department of Revenue on Zoom presented a draft Excise Tax Advisory (ETA) explaining how the multiple points‑of‑use (MPU) retail sales tax exemption would apply to bundled software maintenance agreements and asked the public for comment before adoption.
The presenter, a tax policy specialist in the Department's Interpretations and Technical Advice division (Tiffany Doe), said the draft ETA applies only to software maintenance agreements that meet the state's bundled‑transaction rule and that taxpayers must submit written comments by Dec. 11, 2024. "This meeting was announced through publications on the department's website on October 30th, 2024," Doe said, and she provided the draft ETA and examples on the Department's website for review.
The draft ETA sets three conditions for a bundled software maintenance agreement (referred to in the presentation as a NESMA) to qualify for MPU treatment: the bundle must include one or more MPU‑eligible digital products…
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