The impact of California's technology transfer agreement statutes on sales tax in a post-Nortel world

Apart from simply causing California Code Regulation §1507 to be amended, the Nortel decision is likely to have a direct and profound change on purchases of pre-written software (also referred to as "canned" or "off the shelf" software) in California. At the same time, the changes brought on by the "Nortel" decision have created an environment filled with both uncertainty and opportunity for state and local tax practitioners in California. This article provides background information regarding the relevant law, explains what has changed, and provides guidance for practitioners on how to take advantage of the current opportunities that may only be available in the short term.