PSC 7A20: IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL — Federal Procurement Code

Description

Application development software delivered by perpetual license, consisting of analysis, design, development, code, test and release packages associated with application development projects.

Includes

Software that is licensed for use indefinitely. This can also be referred to as perpetual, indefinite, permanent, continuous, or ever lasting.

Excludes

Excludes end-user productivity software.

Suggested adjacent classifications

PSC codes describe what the government buys. These related classifications help connect procurement codes to industries, commodities, and trade workflows.

Frequently asked questions

What is NAICS 7A20?

NAICS 7A20 is the North American Industry Classification System code for IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE). It classifies this business activity for statistical, regulatory, and government procurement purposes. Federal agencies use NAICS codes to collect and publish data about the US economy, determine SBA size standards, and set aside contracts for small businesses.

What licenses and permits does a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) need?

A IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) typically needs a local business license, a federal EIN from the IRS, and industry-specific permits depending on the sector. Check with your city or county clerk for a general business license, your state's professional or industry licensing board for any required occupational licenses, and your state's tax authority for a sales tax permit if you sell taxable goods or services.

How do I register a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) business in the United States?

To register a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) business, first choose your legal structure: sole proprietorship (simplest, uses SSN), LLC (personal liability protection, files with your Secretary of State), or corporation (Form 1120 or 1120-S). Register your business name (DBA) with your county if operating under a trade name. Obtain an EIN from the IRS at irs.gov/ein. Register with your state revenue department for any applicable taxes.

What tax forms does a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) file with the IRS?

Tax forms depend on your entity type. A sole proprietor files Schedule C with Form 1040 and Schedule SE for self-employment tax (15.3%). An LLC taxed as a partnership files Form 1065 with Schedule K-1s. A C-Corporation files Form 1120 (21% flat rate). An S-Corporation files Form 1120-S. All businesses paying employees file Form 940 (FUTA) annually and Form 941 quarterly. Estimated tax payments are made via Form 1040-ES four times per year.

Is IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) the right NAICS code for my business?

Your NAICS code should reflect your primary business activity — the one generating the most revenue or value. If IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) describes your main line of business, NAICS 7A20 is likely correct. If you have multiple distinct activities, you may need separate codes for statistical reporting. For federal contracting, your SAM.gov registration should use the code that best matches the work you perform. Review the official NAICS 7A20 description and exclusions to confirm it fits your operations.

Does a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) need to comply with COPPA?

The Children's Online Privacy Protection Act (COPPA) applies if your website or app is directed to children under 13 or you have actual knowledge you're collecting personal information from children under 13. You must post a clear privacy policy, provide notice to and obtain verifiable parental consent before collecting data, allow parents to review and delete children's data, and maintain reasonable security. FTC fines for COPPA violations can exceed $50,000 per violation.

Does a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) need to collect sales tax on digital products and SaaS?

Sales tax on digital products (software downloads, SaaS subscriptions, streaming, e-books) varies by state. As of 2025, approximately 30+ states tax digital goods and services. SaaS is specifically taxable in states like Texas, New York, Washington, and Ohio but exempt in California and Florida. Economic nexus thresholds (typically $100K revenue or 200 transactions per state) apply to remote sellers of digital products post-Wayfair. Check each state where you have customers.

What data breach notification obligations does a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) have?

All 50 states have data breach notification statutes requiring you to notify affected individuals and state regulators (usually the attorney general) within a specified timeframe (typically 30-45 days) if personal information is compromised. Some states (e.g., Florida) require notification within 30 days. If the breach affects 500+ residents in a state, you may also need to notify consumer reporting agencies (Equifax, Experian, TransUnion). Healthcare breaches affecting 500+ must be reported to HHS and local media.

What is an EULA and does a IT AND TELECOM - APPLICATION DEVELOPMENT SOFTWARE (PERPETUAL LICENSE SOFTWARE) need one?

An End User License Agreement (EULA) grants users a limited license to use your software while retaining your IP rights. It differs from Terms of Service in that it focuses on license scope, restrictions (no reverse engineering, no reselling), ownership, termination conditions, and warranty disclaimers. EULAs are essential for downloadable software, mobile apps, and desktop applications. Open-source software uses specific license types (MIT, GPL, Apache 2.0) instead.