A number of American states charge sales tax on purchases of online services, including Software-as-a-Service (SaaS). This means that Aha! needs to collect sales tax from customers in applicable states. Sales tax applicability is based on where a company has "nexus" and where their customers are located and using the service.
Nexus can be triggered when a company has either a physical presence in a state (say, an office, warehouse or employees in a given state) or an economic presence there (a combination of sales or transaction revenue that meet a given state's legal definition of economic presence). Each state can define and regulate nexus and applicable SaaS sales tax differently.
Aha! will charge sales tax based on customer's billing addresses in the following states where we have nexus and sales tax applies to SaaS: AZ, CT, HI, MA, NY, OH, PA, SC, TX, UT, WA and the District of Columbia (as of July 24, 2019).
However, this list will grow over time as we expand the Aha! team in different states and as economic nexus laws continue to develop. Customers can change their billing address based on their use of Aha! if sales tax should be attributed to a different state.
If your company is tax exempt, please do the following:
- U.S. based companies -- let us know and share your tax exemption document with us.
- Note that we have been collecting sales tax internationally for some time in certain jurisdictions. For EU and New Zealand companies – please share your VAT or GST tax ID number with us so we can update our billing system (if you have not already done so).
If you have further questions about the specific tax rates or feel that your organization has been incorrectly assessed and is exempt from state sales tax, please have your billing account owner reach out to the Aha! Customer Success team at firstname.lastname@example.org