US States That Tax SaaS Subscriptions

Which US states apply sales tax to Software-as-a-Service subscriptions in 2026. Economic nexus still applies even where SaaS is non-taxable.

Whether your SaaS subscription is subject to sales tax depends entirely on state definitions. These states generally treat SaaS as taxable under their sales-tax regime (definitions and product carve-outs can shift — verify with state DOR before registering).

• Connecticut$100,000 · 6.35%
  • State rate 6.35% applies to qualifying SaaS revenue.
• Hawaii$100,000 · 4.00%
  • State rate 4.00% applies to qualifying SaaS revenue.
• Iowa$100,000 · 6.00%
  • State rate 6.00% applies to qualifying SaaS revenue.
• New Mexico$100,000 · 4.88%
  • State rate 4.88% applies to qualifying SaaS revenue.
• New York$500,000 · 4.00%
  • State rate 4.00% applies to qualifying SaaS revenue.
• Ohio$100,000 · 5.75%
  • State rate 5.75% applies to qualifying SaaS revenue.
• Pennsylvania$100,000 · 6.00%
  • State rate 6.00% applies to qualifying SaaS revenue.
• Rhode Island$100,000 · 7.00%
  • State rate 7.00% applies to qualifying SaaS revenue.
• South Dakota$100,000 · 4.20%
  • State rate 4.20% applies to qualifying SaaS revenue.
• Tennessee$100,000 · 7.00%
  • State rate 7.00% applies to qualifying SaaS revenue.
• Texas$500,000 · 6.25%
  • State rate 6.25% applies to qualifying SaaS revenue.
• Utah$100,000 · 4.85%
  • State rate 4.85% applies to qualifying SaaS revenue.
• Washington$100,000 · 6.50%
  • State rate 6.50% applies to qualifying SaaS revenue.
• West Virginia$100,000 · 6.00%
  • State rate 6.00% applies to qualifying SaaS revenue.

Even in SaaS-non-taxable states, if you cross the economic nexus threshold on subscription revenue you must register and file — you just report zero taxable sales on the return.