If an optional agreement for prewritten software includes future updates or "tangible deliverables" (like new code versions), it may become subject to tax .
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Out-of-state vendors must collect tax if they have a physical presence or meet economic thresholds ($100,000 in annual sales or 200+ transactions in Michigan). If an optional agreement for prewritten software includes
If a maintenance agreement is required as part of the purchase of taxable prewritten software and includes future updates or enhancements, the entire cost is generally taxable . Optional Agreements: Michigan Sales Tax On Software Maintenance