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Did Your Recent Audit Reveal MESMA Tax Issues?

If your business has undergone a sales or use tax audit in Washington state, you may have encountered unexpected assessments related to Mixed Element Software Maintenance Agreements (MESMA). These transactions have long been a point of contention due to how the Multiple Points of Use (MPU) sales tax exemption applies.

From 2010 and up until the issuance of a previous Excise Tax Advisory (ETA), the value of the maintenance portion of a software agreement has not been addressed and is fully taxed.

This whitepaper provides:

• • A breakdown of how the MPU exemption could apply to MESMA purchases.
  • Key implications for businesses with historical MESMA purchases.
  • Steps to preserve and protect the ability to make adjustments.