- Texas taxes SaaS as a data processing service at 6.25% state sales tax, plus up to 2% local tax, for a maximum 8.25% combined rate.
- A 20% exemption applies to SaaS data processing charges, so only 80% is taxable; this lowers the effective rate to about 5% state and 6.6% combined.
- Downloadable software and mobile apps are fully taxable as tangible personal property, with no partial exemption.
- Remote sellers hit economic nexus at $500,000 in Texas revenue over 12 months and must register for a Texas Sales and Use Tax Permit.
- B2B and B2C sales are generally taxable unless an exemption or resale certificate applies; remote sellers may elect a 1.75% flat local use tax rate for an 8% combined rate.
Source: 1stopvat.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
