Commodity Codes for Software Licenses

When purchasing software, it is important for users to differentiate between perpetual and subscription software licenses:
  • Perpetual software licenses are used for an unlimited time. A word processing program, such as Microsoft Office Word, that is purchased to install on computers is an example of perpetual software license. The transaction fee is applicable to perpetual licenses and users should use a non-900 commodity code such as 208-20 – PC Software: Business Software.
  • Subscription software licenses are purchased for a specific timeframe. Purchasing one year access to a research database, such as LexisNexis, is an example of subscription software license. The transaction fee is not applicable to subscription licenses and users should use a 900-series commodity code such as 920-07 – Services: Applications Software for Microcomputer Systems.