Minnesota Software Sales Agreement
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FAQ
Generally, sales tax in Minnesota is not imposed on most SaaS products. However, some digital goods are taxable in Minnesota. It's important to evaluate your product's specific functionality to understand whether it's taxable under Minnesota law.
Today, 24 states tax SaaS services, and an additional 7 states tax SaaS if customers are required to download software. Each state has come to this conclusion in different ways. For example, some states consider SaaS a service, not a product.
In most states, where services aren't taxable, SaaS also isn't taxable. Other states, like Washington, consider SaaS to be an example of tangible software and thus taxable.
Web page development is not taxable. The service provider must pay sales or use tax on items purchased to produce the web page, such as photography, software packages, graphics, sound, or video.
Oklahoma does not tax any cloud, SaaS, or digital products. Generally speaking, the state only taxes physical goods and limited, explicitly enumerated services. This means that businesses offering digital products in the state most likely do not need to collect and remit sales tax on Oklahoma transactions.
In Minnesota, the sales taxability of digital products is dependent on the nature of the service provided. Generally, sales tax in Minnesota is not imposed on most SaaS products. However, some digital goods are taxable in Minnesota.
