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Revenue answers attendee questions on payroll services, website development and POS taxability
Summary
In the webinar Q&A, department staff said payroll services (e.g., QuickBooks payroll) are exempt while QuickBooks subscriptions are taxable; website development is likely taxable as software; POS and managed services depend on functionality, ownership and purpose.
During the webinar Q&A, attendees asked practical, fact‑pattern questions. In response to a question about QuickBooks, the department said a QuickBooks subscription is taxable while QuickBooks payroll (payroll processing services) can be exempt: "Yes. So payroll services are exempt or exactly exempt in the law," a panelist said.
Panelists also addressed website work: website design and development typically fits the department’s definition of computer software and is therefore taxable, but advertising purchases on another website are not treated as software creation. On point‑of‑sale (POS) systems and managed service providers, audit staff said taxability depends on the system’s functions, ownership and whether the provider modifies or owns the software.
The department reiterated that questions with complex fact patterns should be submitted via revenue.support@tn.gov (or Zendesk) with detailed contract language to obtain a specific determination.
