The Multiple Points of Use Certificate

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The Multiple Points of Use Certificate

When a company purchases software that is concurrently used in multiple tax jurisdictions, this presents a problem for both the company and its software supplier, because the sales tax related to the purchase must be remitted to multiple tax jurisdictions. To avoid this concern, the company can apply for a Multiple Points of Use (MPU) certificate, which relieves the software supplier from any obligation to collect and remit sales taxes. Instead, the company buying the software pays a use tax on the purchase, which it apportions among the tax jurisdictions using any reasonable method that is consistently and uniformly applied, and which is supported by business records. The obvious apportionment approach would be based on the number of software users in each jurisdiction. Since the MPU is included in the Streamlined Sales and Use Tax Agreement that is gradually finding acceptance in most state governments, this should become a common option in the near future.

The MPU can only be used for pre-written software that is delivered electronically. It does not apply to software that is pre-loaded on computers at the point of sale.

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