Is SaaS taxable in the US?

It depends on the state. There's no federal sales tax, and each state decides for itself. Roughly half the states with a sales tax tax SaaS, some only in part (Texas taxes 80% of the price, Connecticut charges 1% for business use), and the rest don't. Five states have no statewide sales tax at all.

Which states are starting to tax SaaS?

California and Colorado both start taxing SaaS and downloaded software on 1 January 2027. Recent additions include Louisiana (2025), Maryland's 3% rate for business software (July 2025), Vermont (2024) and Kentucky (2023).

If a state taxes SaaS, do I have to collect it?

Only once you have nexus there. For most remote sellers that means passing the state's economic nexus threshold, usually $100,000 in sales a year. Below it, you don't collect, even in a state that taxes SaaS. Check each state with the US nexus calculator.

Are e-books, music and video taxed the same way as SaaS?

Often not. Many states that don't tax SaaS do tax downloaded e-books, music and video, and the reverse. Switch the map to e-books, music and video to see that picture.

Where does this data come from?

SaaS verdicts follow Kintsugi's SaaS sales tax chart and digital products follow Quaderno's state-by-state guide, both checked against each state's own guidance, which every state links to. It's a guide, not legal advice: for a large sale or an unusual product, confirm with the state or with us.

SaaS Sales Tax by State: Is SaaS Taxable?

Whether you charge sales tax on SaaS depends entirely on the state your customer is in. Pick a state on the map to see how it taxes SaaS and digital products like e-books, music and video, what’s changing, and the official rule behind it.

Is it taxable? 50 states + DC

Taxable 18
Partly taxable 4
Not taxable 24
No sales tax 5
Change coming

State

Pick a state on the map or from the list to see how it taxes SaaS and digital products, what’s changing and where the rule comes from.

Checked 6 November 2026 against each state’s guidance. Sources: Kintsugi (SaaS) and Quaderno (digital products).

Ask which states you owe →

How to read the map

Taxable: charge sales tax on SaaS sold to customers in that state, once you have nexus there.
Partly taxable: the state taxes some SaaS sales but not others. Texas taxes 80% of the price, Connecticut charges 1% on business use instead of 6.35%, Iowa exempts business customers and Ohio taxes only business use.
Not taxable: the state doesn’t tax SaaS. Some cities still do, Chicago and Denver among them.
No sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax. Alaskan towns can charge their own.
A dot marks a state whose rule is changing. California and Colorado start taxing SaaS on 1 January 2027.

Taxable doesn’t mean you owe it yet

A state can only make you collect its sales tax once you have nexus there. For a SaaS company selling remotely, that usually means passing the state’s economic nexus threshold, often $100,000 in sales a year. Selling $20,000 into Washington doesn’t oblige you to collect, even though Washington taxes SaaS.

So the order is: find the states where you have nexus with the US nexus calculator, then check this map for which of those states tax what you sell. Where both are true, you register and collect.

SaaS or digital product?

States split software and digital content into different buckets, and the bucket decides the tax:

SaaS: software customers use online without installing it, billed as a subscription.
Downloaded software: software the customer installs. Often taxed even where SaaS isn’t (Illinois, Indiana, Kansas, North Carolina).
Digital products: e-books, music, video and streaming. Many states tax them only when the customer gets to keep them, not on subscriptions.

If you sell a mix, such as SaaS with a downloadable desktop app, the downloaded part can change the answer. Each state’s detail mentions it where it matters.

SaaS and digital goods taxability in every state

As of 6 November 2026, 21 states and DC tax SaaS (4 of them only in some cases), 24 don’t, and 5 have no statewide sales tax. Changes that haven’t started yet are flagged in the table.

State	SaaS	E-books, music, video	What to know
Alabama	Not taxable	Taxable	Not taxed in practice: Alabama taxes software licenses, but has no rule or ruling that reaches software customers only access online. Ask the Department of Revenue if your sales there are large.
Alaska	No sales tax	No sales tax	No state sales tax, but many cities and boroughs have one. Those in the Alaska Remote Seller Sales Tax Commission tax SaaS, streaming and downloads sold by remote sellers.
Arizona	Taxable	Taxable	Taxable under the transaction privilege tax (TPT), which treats access to software as renting it out. Cities add their own tax on top.
Arkansas	Not taxable	Taxable	Not taxable: software delivered electronically, including access online, is outside Arkansas sales tax.
California	Not taxable	Not taxable	Not taxable until 31 December 2026. From 1 January 2027, prewritten software is taxable however it’s delivered, including SaaS. From 1 January 2027: SaaS and downloaded software become taxable (SB 122).
Colorado	Not taxable	Taxable	Not taxable by the state until 31 December 2026, but home-rule cities such as Denver and Boulder already tax it. From 1 January 2027 the state taxes software however it’s delivered, except custom and negotiated-license software. From 1 January 2027: SaaS and downloaded software become taxable statewide (HB26-1223).
Connecticut	Partly taxable	Taxable	Taxable, at 1% when a business buys it for business use and at the full 6.35% for personal use.
Delaware	No sales tax	No sales tax	No sales tax. Delaware taxes the seller’s gross receipts instead, which isn’t charged to the customer.
Florida	Not taxable	Not taxable	Not taxable when nothing tangible is delivered. Software sold together with hardware is taxable.
Georgia	Not taxable	Partly taxable	Not taxable: Georgia law excludes remote access to software.
Hawaii	Taxable	Taxable	Taxable: Hawaii’s general excise tax (4%, plus a county surcharge in most counties) falls on the seller’s income from SaaS. Sellers usually pass it on.
Idaho	Not taxable	Partly taxable	Not taxable: software accessed remotely isn’t tangible property in Idaho.
Illinois	Not taxable	Not taxable	Not taxable by the state, unless the customer is given software to install. Chicago is different: its lease tax charges 15% on cloud software used in the city.
Indiana	Not taxable	Partly taxable	Not taxable when the customer only accesses the software online and downloads nothing.
Iowa	Partly taxable	Taxable	Taxable for consumers. Exempt when a business buys it only for use in its business, which covers most B2B sales; collect an exemption certificate.
Kansas	Not taxable	Not taxable	Not taxable when the software is hosted by the seller and the customer never receives a copy.
Kentucky	Taxable	Taxable	Taxable at 6% since 1 January 2023, as a “prewritten computer software access service”.
Louisiana	Taxable	Taxable	Taxable since 1 January 2025, at the state rate plus parish taxes. The business exemptions are narrow.
Maine	Not taxable	Partly taxable	Not taxable when the software runs on servers outside Maine and nothing is downloaded. If the license lets the customer download it, it’s presumed taxable.
Maryland	Taxable	Taxable	Taxable at 6%, or 3% when a business uses it only in its own enterprise systems (since 1 July 2025).
Massachusetts	Taxable	Not taxable	Taxable at 6.25% as standardized software. Business customers using it in several states can apportion the tax.
Michigan	Not taxable	Not taxable	Not taxable when it runs entirely in the browser. Installing a desktop agent or app can make it taxable at 6%.
Minnesota	Not taxable	Taxable	Not taxable: subscriptions to hosted software aren’t taxed.
Mississippi	Not taxable	Taxable	Not taxable when the software is hosted outside Mississippi and used only over the internet (since 1 July 2023). Software hosted in the state is taxable at 7%.
Missouri	Not taxable	Not taxable	Not taxable: SaaS isn’t tangible property or a taxable service in Missouri.
Montana	No sales tax	No sales tax	No general sales tax. The resort-town taxes don’t cover software.
Nebraska	Not taxable	Taxable	Not taxable in practice: Nebraska taxes software furnished to the customer, but access-only SaaS isn’t listed and there’s no ruling taxing it.
Nevada	Not taxable	Not taxable	Not taxable: nothing tangible changes hands.
New Hampshire	No sales tax	No sales tax	No general sales tax.
New Jersey	Not taxable	Taxable	Not taxable, unless the service counts as an “information service”, which is taxed at 6.625%.
New Mexico	Taxable	Taxable	Taxable under the gross receipts tax, which falls on the seller. Sellers usually pass it on.
New York	Taxable	Not taxable	Taxable as a license to use prewritten software, at the state rate plus local tax. Customers with users in several states can split it.
North Carolina	Not taxable	Taxable	Not taxable: remote access to software isn’t taxed, because nothing is delivered.
North Dakota	Not taxable	Not taxable	Not taxable in practice: hosted access isn’t on the taxable list, and there’s no ruling taxing it.
Ohio	Partly taxable	Partly taxable	Taxable when bought for business use, as a data processing or information service. Not taxable when bought for personal use.
Oklahoma	Not taxable	Not taxable	Not taxable: electronically delivered software is exempt, and a September 2026 ruling applied that to SaaS.
Oregon	No sales tax	No sales tax	No sales tax.
Pennsylvania	Taxable	Taxable	Taxable at 6% as canned software, plus 1% in Allegheny County and 2% in Philadelphia.
Rhode Island	Taxable	Taxable	Taxable at 7% since 1 October 2018.
South Carolina	Taxable	Partly taxable	Taxable as a communications service, at the state rate plus local tax.
South Dakota	Taxable	Taxable	Taxable: every service is taxed in South Dakota unless the law exempts it, and SaaS isn’t exempt.
Tennessee	Taxable	Taxable	Taxable, at the state rate plus local tax, based on where the customer uses it.
Texas	Partly taxable	Taxable	Taxable as a data processing service, on 80% of the price: 20% is exempt. At the 6.25% state rate that’s an effective 5%, before local tax.
Utah	Taxable	Taxable	Taxable when used in Utah. Custom software isn’t.
Vermont	Taxable	Taxable	Taxable since 1 July 2024. It was exempt before that.
Virginia	Not taxable	Not taxable	Not taxable: nothing tangible changes hands. Software sold with hardware can be.
Washington	Taxable	Taxable	Taxable as a “digital automated service”, at the state rate plus local tax. IT services and custom software became taxable too on 1 October 2025.
Washington D.C.	Taxable	Taxable	Taxable as a data processing service, at 6%.
West Virginia	Taxable	Partly taxable	Taxable for most SaaS. The exemption only covers certain data processing and communications software.
Wisconsin	Not taxable	Taxable	Not taxable when it runs on your servers and the customer doesn’t operate or control them. Downloaded software is taxable.
Wyoming	Not taxable	Partly taxable	Not taxable in practice: SaaS isn’t on Wyoming’s taxable list, and there’s no guidance taxing it.

Sources: Kintsugi, SaaS Sales Tax by State (SaaS) andQuaderno, US Sales Tax on Digital Products (digital products), each checked against the state’s own guidance. Each state’s guide links its source.

US nexus calculator: which states you have to collect in
US sales tax calculator: the combined rate at any ZIP code
Stripe Tax for SaaS and digital goods: what Stripe Tax does and doesn’t cover
US sales tax nexus for digital products and SaaS

SaaS Sales Tax by State: Is SaaS Taxable?

How to read the map

Taxable doesn’t mean you owe it yet

SaaS or digital product?

SaaS and digital goods taxability in every state

Related