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Sales tax

Sales tax on Tallyfy subscriptions

You won’t see sales tax on your Tallyfy subscription. Tallyfy is based in Missouri, where SaaS isn’t subject to sales tax. We don’t currently meet economic nexus thresholds in other states either, so we don’t collect sales tax anywhere.

Why Missouri doesn’t tax SaaS

Missouri taxes tangible personal property and certain listed services. Remotely-accessed software isn’t on that list.

The Missouri Department of Revenue treats SaaS differently from downloadable software. When you use Tallyfy, you’re accessing servers remotely - you’re not downloading anything. No physical transfer happens. That distinction keeps SaaS in the non-taxable category.

Recent letter rulings from Missouri’s tax authority confirm this. They’ve consistently held that subscription-based, remote-access digital services aren’t taxable as tangible personal property or telecommunications services.

What about other states?

As a Missouri company, Tallyfy only needs to charge sales tax in other states when it hits certain thresholds - called “economic nexus.” Each state sets its own thresholds, typically based on sales volume or transaction counts.

Once a company crosses these thresholds, it must register and start collecting sales tax - but only if that state actually taxes SaaS.

About 25 US jurisdictions tax SaaS in some form. New York, Texas, and Washington tax it fully. California and Florida don’t tax it at all. Some states, like Iowa, tax it for consumers but exempt business use.

We monitor our sales by state. If we cross the threshold in a state that taxes SaaS, we’ll register there and update billing accordingly. Affected customers will get advance notice.

B2B vs B2C

Most US states that tax SaaS apply the same rules to both B2B and B2C transactions.

A few states provide business-use exemptions, but you’d need to provide exemption certificates. Since Tallyfy primarily serves business customers, you might qualify in certain states - though we’re not collecting tax anywhere right now.

International VAT

International tax works differently:

European Union (EU):

  • B2C sales: Subject to VAT at the customer’s country rate
  • B2B sales: Usually “reverse charged” when you provide a valid VAT ID
  • We’d use the Non-Union OSS scheme 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: Canada has GST/HST, Australia has GST, and each country has its own rules.

We’re not registered for VAT in any country. If this changes, we’ll provide advance notice.

Economic nexus thresholds

Thresholds vary by state and change frequently. Some states have no sales tax at all (Delaware, Montana, New Hampshire, Oregon), while others set different dollar amounts and transaction counts as triggers.

What this means for you

For US customers:

  • No sales tax on your Tallyfy subscription currently
  • If this changes, you’ll get at least 30 days advance notice
  • You’re still 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

Future changes

Tax laws evolve constantly. States are expanding their definitions of taxable services, and international agreements are harmonizing digital taxation.

We track these changes closely:

  1. Monitor sales thresholds quarterly
  2. Track legislative changes in sales tax laws
  3. Register early when approaching thresholds
  4. Communicate changes to affected customers early

Disclaimer

This page reflects our current understanding of applicable tax laws. Tax laws change frequently, and this isn’t tax advice.

We base our positions on Missouri Department of Revenue guidance, state tax authority rulings, and consultation with tax professionals. Laws may have changed since this was written, and your situation might differ.

Questions?

For questions about your tax obligations, exemption certificates, international tax requirements, or changes to our tax collection - email support@tallyfy.com or use the in-app chat.

We can discuss your situation, provide invoices in your required format, or point you to the right tax resources. We can’t give tax advice, but we can explain our policies.

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