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Sales Tax on Digital Goods by State Cheat Sheet by

Sales Tax on Digital Goods by State
software     digital     tax     goods     state     sales

Introd­uction Digital Goods

Digital Goods:
Online data processing services.
Downloaded software.
Downloaded books, e.g. eBooks & Kindle.
Downloaded music, digital audio files e.g. iTunes & podcasts.
Downloaded movies or digital video, e.g Netflix & Amazon Prime.
Other downloaded electronic goods.

Sales Tax on Digital Sales 2/2018

State
Tax
Notes
Alabama
YES
Digital downloads are generally considered tangible personal property and are taxable at the same rate as other tangible personal property.
Alaska
NO
No sales tax in the state.
Arizona
YES
Digital downloads are generally considered tangible personal property and are subject to gross receipts tax.
Arkansas
NO
Digital subscr­iptions are also tax exempt. Changing to taxable in 2018.
California
NO
If you provide a physical copy or physical storage then the sale is taxable.
Colorado
YES
Electronic delivery of “legal public­ation” newspapers are exempt, since physical copies of those same newspapers are exempt.
Connec­ticut
YES
Sales or purchases of ‘digital downloads’ from the Internet are taxed at a reduced rate of 1%.
Delaware
NO
No sales tax in the state.
Florida
NO
If the item is sold with tangible personal property then the entire sale would most likely be subject to Florida sales tax.
Georgia
NO
No sales tax in the state.
Hawaii
YES
Digital products are taxable in Hawaii.
Idaho
YES
Taxable if permanent right to use, Tax-exempt if leasing or renting the product.
Illinois
NO
Digital products are tax exempt in Illinois.
Indiana
YES
Includes audio works, audio visual works and books.
Iowa
NO
No sales tax in the state.
Kansas
NO
No sales tax in the state.
Kentucky
YES
Considered tangible personal property.
Louisiana
YES
Digital products are taxable in Louisiana.
Maine
YES
Digital products are taxable in Maine.
Maryland
NO
Maryland does not expressly state whether digital products are taxable or non-ta­xable, so it is generally assumed they are tax exempt.
Massac­husetts
NO
No sales tax in the state.
Michigan
NO
No sales tax in the state.
Minnesota
YES
Considered tangible personal property. Student digital textbooks and instru­ctional materials are exempt.
Missis­sippi
YES
Digital products are taxable in Missis­sippi.
Missouri
NO
No sales tax in the state.
Montana
NO
No sales tax in the state.
 

Continued

State
Tax
Notes
Nebraska
YES
Digital products and digital codes to access such products are also taxable.
Nevada
NO
Also includes audio-­visual works, for both temporary and permanent sales.
New Hampshire
NO
No sales tax in the state.
New Jersey
NO
Includes digital audio-­visual works like movies, audio works like music and ringtones and digital books.
New Mexico
YES
Digital products are taxable in New Mexico. Most transa­ctions are subject to New Mexico’s gross receipts tax (the state’s version of sales tax).
New York
NO
However, there are some exceptions to ebooks.
North Carolina
YES
Digital audio works, audiov­isual works, books, magazines, newspa­pers, newsle­tters, reports or other public­ations, photog­raphs or greeting cards delivered electr­oni­cally are all considered tangible personal property.
North Dakota
NO
No sales tax in the state.
Ohio
YES
Digital audiov­isual work, digital audio work and digital books are taxable.
Oklahoma
NO
No sales tax in the state.
Oregon
NO
No sales tax in the state.
Pennsy­lvania
YES
Photos, books, games and other downloads are taxable.
Rhode Island
NO
No sales tax in the state.
South Carolina
NO
No sales tax in the state.
South Dakota
YES
Digital products are tax exempt in South Carolina.
Tennessee
YES
Digital products are tax exempt in Tennessee.
Texas
YES
Taxable as long as the item also taxable if sold in physical format.
Utah
YES
Digital products are taxable in Utah.
Vermont
YES
Digital products are taxable in Vermont, whether transf­erred electr­oni­cally for permanent or temporary use.
Virginia
NO
No sales tax in the state.
Washington
YES
Digital products are taxable in Washin­gton. This includes downloaded digital goods like music and movies, streamed and accessed digital goods, and digital automated services.
West Virginia
NO
No sales tax in the state.
Wisconsin
YES
Digital goods are taxable in Wisconsin. This includes audio works, audiov­isual works, books and codes used to purchase works (digital or physical) by digital means.
Wyoming
YES
Digital products are taxable in Wyoming. This includes digital audio works, audio visual works and books.

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