- Freemius (updated 16 July 2026) clarifies that AI apps, agents, and chatbots are not a new tax category—authorities classify them as SaaS, digital services, or electronically supplied services, so existing sales tax, VAT, and GST rules apply. Building on the latest AI models does not exempt a product from consumption-tax obligations. [freemius.com]
- In the US, liability arises once you cross a state’s economic nexus threshold (commonly $100,000 in annual sales), though some states like Illinois exempt certain AI/SaaS delivery models. Outside the US, there is often no threshold: the EU and UK apply VAT from the very first B2C sale, so one international customer can trigger obligations. [freemius.com]
- For B2B sales, the reverse charge mechanism can shift the VAT obligation to the buyer—but only after validating their VAT number, not merely their email domain. Freemius recommends assuming an AI app is taxable until confirmed otherwise, and highlights the Merchant of Record model to outsource global tax liability, fraud, and compliance. [freemius.com], [freemius.com]
Sources: Freemius – AI app tax · Freemius – Merchant of Record
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