The CDTFA has announced that it will hold a second workshop on June 27 to allow interested parties to discuss and provide input on crafting a discussion paper on proposed regulatory changes to 18 Cal. Code Regs. §1507, related to technology transfer agreements (TTAs).
Under California’s technology transfer agreement statutory and case law, the value of a copyright/patent holder’s transfer of the use of the copyright/patent can’t be included in the software’s taxable base even if it is sold or transferred on tangible personal property (TPP). How to determine whether a transaction involves a TTTA and to distinguish between the value of the intangible and tangible property has been an ongoing issue for over 10 years.
The last interested parties meeting on proposed regulatory changes was held in late 2019 with no resolution. In early 2024, the first workshop was held and participants expressed interest in a second workshop.
The topics for discussion at the second workshop include, but are not limited to:
- Creating a rebuttable presumption that for consumer transactions the price charged for the transaction is equal to the value of the transferred TPP;
- Creating a rebuttable presumption regarding intellectual property rights transferred with embedded software;
- Establishing an auditable safe harbor;
- How to determine if a separately stated price is reasonable; and
- Any other TTA-related topic raised by participants.
For more information, go to:
www.cdtfa.ca.gov/taxes-and-fees/TTAWorkshopPaperWeb061324.pdf