D.C. Mun. Regs. tit. 9, r. 9-474
Gross receipts from the sale of or charges for data processing services shall be subject to the tax. For the purpose of this section, the term "data processing services" means the processing of information for the purpose of compiling and producing records of transactions, maintaining information, and entering and retrieving information. It also includes word processing, payroll and business accounting, and computerized data and information storage and manipulation.
Examples of data processing services include the following:
Data processing services shall not include the use of a computer by a provider of other services when the computer is used to facilitate the performance of the service or the application of the knowledge of accounting principles and tax laws. Purchasers of data processing services used to perform professional services, such as accounting and legal services, shall be considered consumers of the data processing services and thus shall be subject to the tax on the services.
Gross receipts from the sale, lease or rental, or maintenance of any computer software shall be subject to the tax regardless of whether the software is canned, prepackaged or customized. Examples of taxable computer software and software services include the following:
Data processing services performed, purchased, or delivered outside of the District but subsequently brought into the District for use or consumption shall be subject to the District use tax; Provided, that no sales tax was required to be paid to the other jurisdiction. Data processing services performed or delivered outside of the District for use within other jurisdictions as well as for use within the District shall be subject to the District use tax on a prorated share of the charge; Provided, that no sales tax was required to be paid on that prorated share to the other jurisdiction. Data processing services sold and delivered by the vendor to locations outside of the District shall be exempt from the sales tax.
Vendors providing data processing services may issue a resale certificate on all tangible personal property or services purchased for resale or rental either in the same form or for incorporation in the same form as a material part of other property or services being produced or provided for resale or rental.
For example, if a service were sold to the customer on magnetic tape, the tape may be purchased with a certificate of resale.
Vendors providing temporary help to perform data processing services, including consultation, computer programming, and software alteration, modification, and updating shall be required to collect the tax on these services. The tax shall be collected even if the temporary help performs some inconsequential nontaxable services. However, vendors providing temporary secretarial and clerical help who also perform some inconsequential data processing services shall not be required to collect the tax.
D.C. Mun. Regs. tit. 9, r. 9-474