California Postpones Action on Technology Transfer Agreement Tax Rules

California's State Board of Equalization postpones issuance of regulations governing taxation of software technology transfer agreements from November to at least January 2013 due to universal opposition from the business community to the board's draft proposals so far. SBOE is working toward regulations on taxation of TTAs in the wake of a January 2011 state appellate court ruling in Nortel Networks Inc. v. SBOE. In that case, the court said SBOE exceeded its authority when it excluded all prewritten software from TTAs, which are exempt from sales tax. At an SBOE meeting, Tax Policy Division Chief Susan Buehler tells the five board members that a second interested-parties meeting is being moved from September to January to give board staff and interested parties more time to submit comments and work toward agreement. Formal regulations will be proposed after the next interested-parties meeting.