Issues of sale 

• General meaning – this term is used throughout state law but may also be defined specifically for sales tax purposes and often refers to a transaction in which the customer obtains the unlimited use of or title to whatever is conveyed by the seller.
• SSUTA – SSUTA does not define “sale” as a distinct term. It does define “retail sale and “sale at retail” broadly to mean “any sale, lease, or rental for any purpose other than for resale, sublease, or subrent.” See Appendix C.

• General meaning – this term is also used throughout state law but can be specifically defined for sales tax purposes. In general, a lease is a transfer of the right to possession and use of some item for a period of time.
• SSUTA – The SSUTA defines lease or rental “as any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration. A lease or rental may include future options to purchase or extend.” The definition then goes on to distinguish things that are not leases, which it appears are presumably sales—although, again, the agreement does not define a “sale.”

• General meaning – this term is used generally to describe a transfer of the right of possession and use of some item for a period of time where the rights conveyed are less than would be granted under a lease. Also, the term license is generally used when conveying the right to use an intangible.
• SSUTA – The SSUTA does not define “license” or “license to use.” It does use the term “license” in the context of software. See Rule 309.5 –

“Sourcing Software Term License and Subscriptions (1) Definitions:  As used in this section (a) the term ‘software subscription’ means a transaction requiring additional payments for updates to prewritten computer software and  (b) the term ‘software term license’ means a transaction where the purchaser’s right to continue to use prewritten software is dependent on periodic payment.”

• General meaning – this term may describe a way of conveying information or data or other times in exchange for periodic or per-use charges.
• SSUTA – The SSUTA does not generally define “subscription” but does provide, in Sec. 332, that:

“A state may treat a subscription to products ‘transferred electronically’ differently than a non-subscription purchase of such product. For purposes of this section, ‘subscription’ means an agreement with a seller that grants a consumer the right to obtain products transferred electronically from within one or more product categories having the same tax treatment, in a fixed quantity or for a fixed period of time, or both.”

• General Meaning – a service contract is a type of transaction that is generally used when the seller agrees to provide a service which may have no tangible or other product. For example—a repair service.
• SSUTA – The SSUTA does not define “service” or “service contract.”

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