SAAS Taxes | TaxConnections

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Taxability Of SaaS In Arizona, District Of Columbia, Iowa, Mississippi, Rhode Island And Tennessee

We recently posted an article about the challenges of SaaS taxability and discussed the reasons why SaaS is a particularly sticky subject, tax-wise.

While there are a number of reasons for it, the complexity largely boils down to irregularities in SaaS definitions between states, little uniformity when it comes to SaaS tax legislation and complication brought about by the very nature of the product (is it a “software” or a “service?”). Economic nexus adds an additional layer of difficulty.

Now, we’d like to give you an in depth look at SaaS taxability in 6 more states.

1. Taxability of SaaS in Arizona
Economic Nexus Provisions: Yes

As of 2020, remote companies that make $150,000 in gross sales of tangible personal property or services will trigger Arizona’s economic nexus. Sales made through a marketplace are not included. Starting January 1, 2021, the threshold will lower to $100,000.

SaaS and Cloud Computing Tax Rules: Taxable
Read More

Written by Monika Miles | Posted in SaaS Taxability • SAAS Taxes • TaxConnections

Monika Miles, Taxability Of SAAS in Southwestern States

In some ways, state statutes are crystal clear about which goods or services require the collection of sales and use tax. However, when it comes to Software-as-a-Service (SaaS), cloud computing and electronically downloaded software, the laws become a bit more confusing. When does your company need to collect sales tax on these types of transactions?

To further complicate the issue, the recent Wayfairdecision will affect traditional multi-state sellers (including those that generate revenue from SaaS and software) – not just online sellers. By making nexus easier to establish, companies will need to consider the taxability rules of SaaS in each state in which they have nexus even more closely.

Today is the second in a series that covers how various states across the country define SaaS, cloud computing and electronically downloaded software. Read our first post to find out how California, Utah and Washington handle them, and keep reading for three states in the Southwest: Colorado, New Mexico and Texas!