Current as of January 01, 2020 | Updated by FindLaw Staff
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1. A member state shall adopt, and utilize to determine tax treatment, the core definition for a “bundled transaction” in the agreement.
2. Member states are not restricted in their tax treatment of bundled transactions except as otherwise provided in the agreement. Member states are not restricted in their ability to treat some bundled transactions differently from other bundled transactions.
3. In the case of a bundled transaction that includes telecommunications service, ancillary service, internet access, or audioprogramming or videoprogramming service:
a. If the price is attributable to products that are taxable and products that are nontaxable, the portion of the price attributable to the nontaxable products may be subject to tax unless the provider can identify by reasonable and verifiable standards such portion from its books and records that are kept in the regular course of business for other purposes, including, but not limited to, nontax purposes.
b. If the price is attributable to products that are subject to tax at different tax rates, the total price may be treated as attributable to the products subject to tax at the highest tax rate unless the provider can identify by reasonable and verifiable standards the portion of the price attributable to the products subject to tax at the lower rate from its books and records that are kept in the regular course of business for other purposes, including, but not limited to, nontax purposes.
c. The provisions of this section shall apply unless otherwise provided by federal law.
4. In the case of a transaction that includes an “optional computer software maintenance contract” for prewritten computer software and the state otherwise has not specifically imposed tax on the retail sale of computer software maintenance contracts, the following provisions apply:
a. If an optional computer software maintenance contract only obligates the vendor to provide upgrades and updates, it will be characterized as a sale of prewritten computer software.
b. If an optional computer software maintenance contract only obligates the vendor to provide support services, it will be characterized as a sale of services.
c. If an optional computer software maintenance contract is a bundled transaction in which both taxable and nontaxable or exempt products that are not separately itemized on the invoice or similar billing document, the contract shall be characterized as all taxable.
Cite this article: FindLaw.com - North Dakota Century Code Title 57. Taxation § 57-39.4-32. Bundled transactions - last updated January 01, 2020 | https://codes.findlaw.com/nd/title-57-taxation/nd-cent-code-sect-57-39-4-32.html
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
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