U.S. sales tax

We apply U.S. sales tax on digital services when it is required by the customer’s state and local laws. This affects only customers in states or localities that tax digital services.

U.S. sales tax on digital services is not consistent across the country. Some states tax digital services, others do not, and some apply tax only in specific cases. Rules and rates also change over time.

What this means for your invoices

Only the tax line may change. Your service prices stay the same.
Tax depends on your billing address. If your billing address is in a state or locality that taxes digital services, sales tax will appear on the invoice. If not, you will not be charged sales tax.
Rates can change. States update digital service tax rules and rates regularly. We apply the latest available rules and rates at the time of invoicing.

How we determine your tax

We calculate sales tax based on:

Your billing address state and locality. U.S. sales tax is mainly state based, and many states allow local add-ons.
How that state taxes digital services. Every state defines digital service taxability differently.
Your usage for the billing period. Tax is applied to the taxable part of your invoice based on what you used.

Because rules vary, two customers with the same usage can see different tax results if they are in different states.

Changing your billing address

You can change your billing address once per month.

If you update your address, the new tax jurisdiction and rate take effect on the first day of the next month.
We do not change tax rates mid-month, because invoices must reflect one jurisdiction per billing period. This is a common compliance requirement.

Tax exemptions

If your organization is tax exempt, send us a valid state exemption certificate. After verification, we will stop charging sales tax on future invoices, as required by that state.

Important limits:

Exemptions are state specific. The certificate must match the state on your billing address.
We cannot remove tax retroactively unless state rules allow it and your certificate covered that period.

Need help

If you have questions about how sales tax applies to your account, or if you need help submitting an exemption certificate, our Super Bunnies™ are here to help. Just open a support ticket in the dashboard or email [email protected].