The taxation of computer software is complex, confusing, and in some circumstances, uncertain; although self-created computer software is routinely sold today, especially with the significant increase in the number of ‘‘apps’’ that are created for mobile devices, there is surprisingly little statutory or regulatory guidance on the proper way to tax the sale of such software.

In general, the taxation of software can vary greatly depending upon a multitude of factors, including, for example, whether the software was acquired or developed, and if developed, whether it was developed for internal use or developed for sale in the ordinary course of business, as well as whether the software was sold or licensed.1 This article focuses on the tax aspects of the sale of computer software and related intellectual property by the person whose personal efforts created such IP rights.

Originally Published in Daily Tax Report, 60 DTR J-1 - March 28, 2013.