Press Room: Tax Release

March 14, 2011

It’s time! We will get your sales tax refund claim filed.


Time Sensitive Opportunity
As reported to you last month, if you paid California Sales or Use Tax on licensed or prewritten software and/or related services/agreements, you may be entitled to a refund.

As WTAS reported to you earlier this year, California taxpayers have challenged a regulation that may have improperly limited the statutory exemption provided for Technology Transfer Agreements (TTA). In NORTEL NETWORKS INC v. STATE BOARD OF EQUALIZATION the California Court of Appeal decided in favor of the taxpayer who challenged the State’s narrow interpretation of the exemption provided by the TTA provisions which effectively taxed software. The Court ordered the State to grant the refund request by Nortel for sales tax it paid under audit on sales of exempt software.

UPDATE: The State has filed a Petition for Review with the CA Supreme Court to review the decision of the Appellate court. That means the opportunity continues -- Stay tuned!

When Should You Act?  Now.
Refund claims should be filed as soon as possible since the statute of limitations for sales and use tax is three years from the date the tax is reported and paid. California sales and use taxes are generally due quarterly. Therefore, in order to preserve your refund relating to taxes reported and paid in the first quarter of 2008, you must file your refund claim by April 2011. Thus the time to act is now.

WTAS State and Local Tax professionals understand the complexities and applications of the various sales and use tax exemptions. We have a proven track record finding tax savings for taxpayers in California and other states. WTAS professionals can initially review your sales and use tax returns and underlying software contracts to assist you in determining what tax savings might be available to you. We know the ins and outs of identifying the key components of a claim and how to get it filed.
For more information about WTAS, please visit

What’s Next?
A phone call is all of the time needed for you to understand the basis of our approach, whether your company is a candidate for California tax savings, the favorable cash flow adjustments associated therewith AND how to determine what should be filed NOW. I will be contacting you again soon. In the meantime, please do not hesitate to contact me at (213) 593-2363.