- States are increasingly expanding sales tax to cover SaaS, cloud software, and other digital products as tax codes adapt to the digital economy.
- California and Colorado will make major changes starting January 1, 2027, with California’s SB 122 making prewritten software and SaaS fully taxable regardless of delivery method.
- About 24 states plus Washington, D.C. already tax SaaS in some way, but the rules vary widely by state.
- New York and Texas fully tax SaaS, while states like Connecticut, Iowa, and Maryland apply conditional or differentiated rules.
- Some states, including Illinois and Florida, still exempt SaaS at the state level, though local taxes may still apply.
Source: salestaxinstitute.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.
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