Startup Q&A
Are there any US states requiring sales tax paid on SaaS services?
CEO and Founder of Kruze Consulting
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**Yes, SaaS sales tax in the US does exist. **A few things to consider:
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Which states have SaaS Sales Tax? Here’s a nifty map of which states that have Saas Sales Tax: (kudos to TaxJar!) http://blog.taxjar.com/saas-sale…
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Who does SaaS sales tax apply to? Do you have nexus? ie, Are you subject to Sales Tax in these states?
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In general, do you have Revenue >$500K in sales in that state?
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Do you have Payroll in that state?
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Do you have Assets/Rent in that state?
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When do I have to file? It varies by state, but in general, the more sales tax your collecting, the more frequent the state wants their money. Most due dates are therefore annually, then quarterly, then monthly.
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What is the SaaS sales tax rate? It varies by state, but is usually pretty low. Connecticut, for example, is 1% of SaaS sales.
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**What are the penalties for not filing? **They’re hefty. Usually ~25%. Don’t put this off.
We have a bunch of SaaS clients, and so far only a few have broken into multi-state revenue-based nexus. Good problem to have! Until then, your activity in other states is likely de minimis. BUT WAIT! Your situation is unique, and this is just general info: work with your CPA to determine your liabilities… or hit me up at vanessa@kruzeconsulting.com
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