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We sell SaaS software subscriptions to customers across the United States and do not charge sales tax. I recently heard that regulations have changed in New York to make SaaS software subscriptions taxable.
asked , updated
by emerson89
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Answers
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answered , updated
by wing-j
0Sales tax requirements depend not only on the varying regulations from state to state but also on whether or not your organization has nexus in states where sales tax collection is required for your product or service. You first need to determine whether or not you have nexus in the state of New York that makes you subject to their taxing authority (determinations of nexus vary based on state regulations but common triggers of nexus include having real estate or employees in the state). If you determine that your organization has nexus in New York, the New York Department of Taxation and Finance issued a tax bulletin that suggests that most subscription software sales are considered taxable by the state.You may also want to conduct a review of your organization's nexus in all states (and countries) where your software is sold and become familiar with their sales tax requirements as New York is not the only jurisdiction to focus on updating their tax regulations to increase tax revenue from various types of online transactions that have not traditionally been taxed.