Late in 1997, Ontario Finance released its Tax Legislation Bulletin 97-4 with a draft exemption for consultative purposes. Ontario's position that one company cannot acquire exempt custom software for use by a related group is thus underscored. This narrower definition will likely limit the usefulness of the modifications exemption. That coding probably does not change the original source code, but might be exempt custom software in its own right.
Some issues are outstanding.
Furthermore, Finance hopes that reg. 1013, a limited manufacturing exemption for producers of taxable software, will be finalized this fall. Under the bulletin's draft wording, software producers may have difficulty obtaining an exemption for production or development equipment used to produce both exempt and taxable computer programs. Some changes were made with little or no warning.