Case: Domestic Production Activities Deduction Denied for Proprietary Online Marketplace Software Costs, Allowed for Licensed Building Management Software Costs (E.D. Wis.) (Former IRC §199)



Nov. 17, 2022, 5:00 AM

Direct supplier (T) of housekeeping and maintenance equipment and supplies to nursing homes was not entitled to a deduction for domestic production activities under former I.R.C. §199 for software it developed for maintaining a marketplace whereby nursing homes could purchase supplies as the resulting revenue was derived from providing a service, a district court held, but was allowed such a deduction for its building management software costs for which it granted licenses. The marketplace software was developed to assist nursing homes that have multiple facilities across the country with buying and selling nursing home supplies by creating an electronic …