I agree, no sales tax on services regardless of the state.
A complication in categorizing the support plan as a service is that it includes updates. Furthermore, even if it was a service only it may be taxed in some states.
Many states have taxes on services particularly when those services are performed on tangible personal property. For example in NJ
"The New Jersey Sales and Use Tax Act imposes a tax on the receipts from every retail sale of tangible personal property, specified digital products, and the sale of certain services, except as otherwise provided in the Act
. Tangible personal property can include prewritten computer software delivered electronically. In addition,
most services performed on tangible personal property and specified digital products are taxable unless they are specifically exempted by law. Exempt items include most food sold as grocery items, most clothing and footwear, disposable paper products for household use, prescription drugs, and over-the-counter drugs. "
NY is different, a service alone is NOT taxable, "However, when these otherwise exempt services are provided in conjunction with the sale of prewritten software, the charge for the service is exempt from tax only when the charge for the service is reasonable and separately stated on the invoice or billing statement given to the customer."
Computer software services
Many services related to computer software are exempt. Examples of these services include:
- training
- consulting
- instruction
- troubleshooting
- installing
- programming
- systems analysis
- repairing
- maintaining
- servicing
However, when these otherwise exempt services are provided in conjunction with the sale of prewritten software, the charge for the service is exempt from tax only when the charge for the service is reasonable and separately stated on the invoice or billing statement given to the customer.
Sales of software upgrades
Generally, the sale of a revision or upgrade of prewritten software is subject to tax as the sale of prewritten software. If, however, the software upgrade is designed and developed to the specifications of a particular purchaser, its sale to that specific purchaser is exempt as a sale of custom software.