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Software Payment Guide

This guide provides general information about the process used to pay for pre-written and custom-written computer software licenses. It also provides guidance related to the payment of software maintenance contracts.

Many common desktop software applications may be procured through Information Technology Systems (ITS) pre-negotiated supplier agreements using the campus Purchas​ing Card. Other computer software licenses are procured through a CruzBuy Purchase Order. Information on how to do this is available from Procurement Services. ​​​​​​

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  • Before you start

    Important information to know:

    • Special conditions: Be aware of the following special conditions applying to this type of transaction.
      • Information Technology Services makes available pre-negotiated supplier agreements for use in purchasing commonly-used software for UCSC business purposes
      • Prewritten computer software license types include the following:
        • Software purchased “as-is” without modification
        • Proprietary software developed by an external organization, for which the license for use is offered for sale or lease to UCSC
      • Custom-written computer software license types include the following:
        • Software developed to the specifications of the campus customer
        • Pre-written software modified by the vendor to meet campus customer specifications
    • Avoid conflicts of interest: Refer to the appendices for information covering employee-vendor conflict of interest issues.
    • Tax information: Payments may only be made to recipients with a Social Security Number or an Individual Taxpayer Identification Number (ITIN). Use IRS Form W-7 Application for IRS Individual Taxpayer Identification Number to apply for an ITIN number.
    • Payment: If this is the first time the recipient will be receiving a UCSC non-payroll payment, complete a Payee Setup 204 form.

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  • Ways to pay

    Important information to know:

    • A license involving custom-written software is usually procured through a UCSC business contract executed with the vendor. Contact:
    • A software application procured through a pre-negotiated supplier agreement may be procured using the campus Purchasing Card.
    • All other types of software, and software maintenance contracts, are procured through CruzBuy.

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  • Receipt and documentation requirements

    The original vendor invoice must be submitted in order for a payment to be made to the vendor.

    • Email the FAST/AP Office at authorizing payment when the original purchase order amount is exceeded by $100 to $499.99.
    • Submit a change order request through CruzBuy for payments of $500 or more over the original purchase order amount.

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  • Applicable sales and use tax

    The chart below summarizes important sales tax information related to purchased or leased computer software licenses and to software maintenance contracts:

    Type of Transaction CA Sales Tax? Notes
    Pre-written or custom-programmed computer software; or software maintenance contract updates received electronically, such as through the internet. Campus customer does not receive the software on a CD, DVD, tape or any other physical media. No  
    Pre-written or custom-programmed software; or software maintenance contract updates received on a CD, DVD, tape or other physical media. Yes  
    Custom-programmed computer software in which the UC Regents holds ownership rights No  
    Site licensing and end-user fees for prewritten computer software owned by the vendor Yes  
    Site licensing fees and end-user fees for custom-written computer software owned by the vendor No  
    Web page design, domain name, internet access & monthly service fees No  
    Training or consulting services included in purchase and/or maintenance contract price Yes  
    Training or consulting services purchased as a separate item. Maybe 1
    Troubleshooting and repair fees billed separately or as a separate line item on bill. No  

    Note: Training materials, such as books, CDs, DVDs, if charged separately, are subject to sales tax.

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  • Common oversights

    Speed up getting a payment processed by avoiding these common oversights:

    • Forgetting to provide the recipient’s social security number or individual taxpayer identification number.
    • Forgetting to request a change order from the Purchasing Office when the amount to be paid will exceed the amount allowed on the Purchase Order.
    • Forgetting to submit a Payee Setup 204 form for a first-time reimbursement or payment recipient.

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  • UC Procedure Reference

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  • Where to get help

    Assistance is available for the following topics:

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  • Relevant Appendices

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