Small Business Taxes

Sales Tax for Subscription and Digital Products

Updated 2025-10-28

Taxability of SaaS, downloads, and support plans varies by state; align your invoicing and tax engine configuration accordingly.

  1. Taxability mapping
  2. Sourcing & location
  3. Billing & invoices
  4. Exempt customers
  5. Operational controls

Taxability mapping

Some states tax SaaS as tangible equivalents; others exempt it—configure product codes carefully.

Sourcing & location

Confirm origin vs. destination sourcing and how address validation impacts rates.

Billing & invoices

Show tax lines clearly; prorate correctly for mid‑cycle changes.

Exempt customers

Collect exemption certificates and automate expiry checks.

Operational controls

Run monthly completeness tests between invoicing, tax engine, and GL.