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Sales tax
You won’t see sales tax added to your Tallyfy subscription. We’re based entirely in Missouri, where Software as a Service (SaaS) isn’t subject to sales tax. Since we don’t meet specific economic nexus criteria at present, we don’t currently collect sales tax anywhere. Simple as that.
But let’s dig into why - and what this means for you.
Missouri taxes tangible personal property and certain enumerated services. Remotely-accessed software? Not on that list.
The Missouri Department of Revenue treats SaaS differently from downloadable software. When you use Tallyfy, you’re accessing our servers remotely. You’re not downloading anything. No physical transfer happens. That distinction matters legally - it keeps SaaS in the non-taxable category.
Recent letter rulings from Missouri’s tax authority confirm this position. They’ve consistently held that subscription-based, remote-access digital services aren’t taxable as sales of tangible personal property or telecommunications services.
Here’s where it gets interesting. As a Missouri company, we only need to charge sales tax in other states if we hit certain thresholds - what’s called “economic nexus.”
Each state sets its own economic nexus thresholds - typically based on sales volume or transaction counts. Check your state tax authority for current thresholds, as these change frequently.
Once a company crosses these thresholds, they must register with that state and start collecting sales tax - but only if that state actually taxes SaaS.
Currently, about 25 US jurisdictions tax SaaS in some form. States like New York, Texas, and Washington tax it fully. Others like California and Florida don’t tax it at all. Some states, like Iowa, tax it for consumers but exempt business use.
For Tallyfy specifically: We monitor our sales by state. If we cross the threshold in a state that taxes SaaS, we’ll register there and update our billing system accordingly. We’ll notify affected customers well in advance.
In the US, most states that tax SaaS apply the same rules to both B2B and B2C transactions.
A few states provide business-use exemptions, but you’d typically need to provide exemption certificates. Since Tallyfy primarily serves business customers, you might qualify for these exemptions in certain states - though again, we’re not currently collecting tax anywhere.
International tax works differently:
European Union (EU):
- B2C sales: Subject to VAT at the customer’s country rate
- B2B sales: Usually “reverse charged” when customers provide a valid VAT ID (meaning you handle the tax, not us)
- We’d use the Non-Union OSS scheme to simplify compliance if we start collecting
United Kingdom (UK):
- B2C digital services: Subject to 20% UK VAT from the first sale
- B2B sales: Generally reverse charged with valid VAT registration
Other countries: Each has its own rules. Canada has GST/HST, Australia has GST, and so on.
Currently, we’re not registered for VAT in any country. If this changes, we’ll provide advance notice and help you understand any impacts.
Economic nexus thresholds vary significantly by state and change frequently. Some states have no sales tax at all (like Delaware, Montana, New Hampshire, and Oregon), while others set different dollar amounts and transaction counts as their triggers.
For US customers:
- No sales tax on your Tallyfy subscription currently
- If this changes, we’ll notify you at least 30 days in advance
- You remain responsible for any use tax obligations in your state (consult your tax advisor)
For international customers:
- No VAT/GST currently charged
- B2B customers may have reverse charge obligations
- Check with your local tax authority about your responsibilities
Tax laws evolve constantly. States are expanding their definitions of taxable services. International agreements are harmonizing digital taxation.
We track these changes closely. Our approach:
- Monitor our sales thresholds quarterly
- Track legislative changes in sales tax laws
- Register proactively when we approach thresholds
- Communicate changes to affected customers early
- Help you understand any impacts
Important disclaimer: This page reflects our current understanding of applicable tax laws. Tax laws are complex and change frequently. This information shouldn’t be considered tax advice.
We base our tax positions on:
- Current Missouri Department of Revenue guidance
- State tax authority rulings and statutes
- Consultation with tax professionals
- Industry best practices
We could be wrong. Laws might have changed since we wrote this. Your specific situation might be different.
Tax situations vary by business, location, and use case. If you have questions about:
- Your specific tax obligations
- Exemption certificates
- International tax requirements
- Changes to our tax collection
Please contact us. Email support@tallyfy.com or use the chat feature in your account.
We’re happy to discuss your specific situation, provide invoices in your required format, or connect you with appropriate tax resources. While we can’t provide tax advice, we can explain our policies and help you get the information you need for your own tax compliance.
- Tallyfy doesn’t currently charge sales tax anywhere
- Missouri (our home state) doesn’t tax SaaS
- We’ll collect tax only when legally required
- You’ll get advance notice of any changes
- International VAT/GST isn’t currently collected
- This reflects our current understanding
- Contact us with any questions
Remember: Every business has unique tax obligations. Consult your tax professional about your specific situation. We’re here to help with the Tallyfy side of things whenever you need us.
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