SaaS Taxability by State Map

While some services are ordinarily not subject to sales tax, the fact that they are provided in conjunction with SaaS can make them taxable. For example; Depending on the state, configuration, support, or training may be taxable when provided in conjunction with SaaS, even if they are separately stated on the invoice.

Technology companies involved in providing software, digital services and goods, SaaS, and more, have always found sales tax challenging – especially as it relates to defining the true object of the product/service relative to sales tax statutes. Additionally, the electronic delivery method of these products/services can create situsing challenges relative to sales tax jurisdictions and applicable rates.

In addition to the taxability rules state-by-state, there are additional nuances associated with SaaS within some states. This includes whether you are selling to a business or a consumer (as in Iowa, Maryland and Ohio), unique state sales tax rates (Connecticut), home-rule jurisdictions (Colorado and Illinois), partial exemptions (Texas), and more.

If you sell software, SaaS or digital services in multiple states, keeping on top of changing sales tax rules can be overwhelming. But not realizing your sales tax obligation or not acting on a growing obligation could have big repercussions for your business.

Why TaxConnex?

For tech companies, understanding and following the tax rules for Software as a Service (SaaS) in different states can be confusing. That's where our sales tax compliance services come in. We help tech businesses navigate these complex rules, making sure you stay on track. With our services, you can avoid the headache of trying to figure out the ever-changing sales tax landscape for SaaS on your own. You'll not only stay compliant with state and jurisdictional rules but also save time and resources. This way, your business can focus more on what it does best—innovating and growing—while we handle the sales tax stuff.

“The number one benefit we’ve received from working with TaxConnex is removing our risk with sales tax. As a SaaS platform there are many complications, add to that the 2018 Wayfair decision and things got even more complicated, but we can rely on TaxConnex to help us determine our nexus and comply."

“Ingenico has been using TaxConnex for our Tax Reporting and Consulting for as long as I have been associated with the company (at least 8 years). From Robert Dumas to Jeff Meigs to Cathi Johnson, all have shown the utmost professionalism and timely willingness to assist with questions.”

“With customers all over the US, the sales tax issue was quickly becoming too complicated for us to manage. TaxConnex makes it easy for us to adjust and adapt as our obligation grows and new changes occur.”

"TaxConnex doesn’t overcomplicate things for us, they simplify them. Being able to work closely with [a dedicated practitioner] rather than multiple individuals who don’t understand your business is very helpful. TaxConnex takes a lot of weight and worry off us.”