SaaS and Taxes: Is it Taxable Software or a Non-Taxable Service?

Author: Jamie Szal, Tax Attorney
Published: 11.10.2022
States, eager to replenish their coffers, are doing their darndest to convert SaaS products into taxable, electronically-delivered software. Every state auditor on the hunt for a mega assessment turns to the vendor’s service agreements, searching for any hint as to how the SaaS products should be treated – as services (typically not taxable), or as software (taxable). To make this determination, auditors look at how a SaaS vendor describes itself in its SaaS agreements. In the interest of arming contract negotiators with knowledge, the thrust of this article will highlight some key provisions auditors hone in on. We’ll focus our…