Court Case: South Central Bell v Barthelemy

Question 1

Who were the parties involved in the case?

Answer 1

• South Central Bell
• LA DOR
• LA Supreme Court

Question 2

What year did the case take place in?

Answer 2

1994

Question 3

What were the facts of the case?

Answer 3

• Bell licensed switching systems and software to use in LA offices, some delivered in tangible format, some electronically
• Bell also purchased maint services for software
• LA Parish assessed use tax on all software and maintenance service, saying the software was TPP bc of the fact that it was recorded on a physical form (magnetic tapes)
• Bell argued the software was nontangible, because software is essentially information/knowledge

Question 4

What was the decision of the case?

Answer 4

• The tax tax was not upheld, but the court ruled that the software was considered TPP since it was “knowledge in physical form”
• Court also ruled the delivery method made no difference and the maintenance was not considered repair so it was exempt.

Question 5

Which tax concept was at the forefront of this case?

Answer 5

Tangible vs Non-tangible property

Question 6

What was the significance of this case?

Answer 6

Software could now be considered TPP