SaaS sales tax billing for the US
Subscription billing for US SaaS, with sales tax by state
Two Minute Billing charges SaaS sales tax at the rate you set for each state. The customer's state decides which rate applies. Exempt customers keep their reason on record, and USD renewals are collected by card or ACH through your own payment gateway.
Sales tax on SaaS subscriptions depends on the customer's state
States do not treat SaaS the same way, and rates change. Your billing has to apply the rate you set on every renewal, not only at sign-up, and leave past invoices as they were.
The right rate on every renewal
A renewal invoice with the wrong rate is money you owe or must refund. Each renewal uses the rate you set for the customer's state.
Exempt customers never taxed
An exempt customer who gets taxed disputes the invoice and pays late. Mark them exempt once, with the reason on record.
A billing cost you know in advance
A fee taken as a share of revenue grows with every sale. You pay a flat monthly price, not a share of your revenue.
State rates
Sales tax by state, at the rates you set
Enter a rate for each state where you collect. The customer's state selects the rate on every invoice, at sign-up and on each renewal.
- A rate per stateAdd each state where you collect, with the rate you set for it.
- The customer's state decidesEach invoice applies the rate you set for the customer's state.
- State codes checkedEach state code is checked against the list of US states, so a typo never becomes a rate.
- Taxable or not, per productMark a product as not taxable, and its invoice lines carry no tax.
Exemptions
Exempt customers, with the reason on record
When a customer such as a school district is exempt, its invoices show no sales tax. Mark it exempt once, and every renewal follows.
- Exempt customersMark a customer exempt, and their invoices carry no sales tax.
- The reason on recordThe exemption reason stays on the record, ready when anyone asks.
- Tax-inclusive pricingQuote $49.00 before tax, or $49.00 with tax inside it. Tax is backed out of an inclusive price.
- Rates kept on each invoiceThe rate and registration are recorded at issue. A later rate change never re-taxes an old invoice.
Payments
USD by card and ACH, through your own payment gateway
Collect ACH recurring payments and cards on a gateway account you own. Money settles with you, never with us.
- Cards in USDEach renewal charges the card on file, in dollars.
- ACH recurring paymentsCustomers pay renewals straight from their bank account by ACH debit.
- Gateways for bank debitsACH through Stripe, GoCardless or Authorize.net (eCheck). Venmo through Braintree.
- Your account, your moneyPayments settle in your own gateway account, not in ours.
Recovery and reports
Failed renewals recovered, with MRR you can trust
Dunning wins back failed payments. A hosted checkout and buy links sign customers up, and a self-serve portal serves them after. All for a flat monthly price.
- Retries on your scheduleA failed renewal is retried on the days you set.
- Backup cardsWhen the main card fails, a backup card on file can pay the invoice.
- One-click payment linksThe customer gets a link that pays the open invoice in one click.
- MRR, churn and cohortsReports read from the same invoices and payments, in USD.
From state rates to every renewal
- Step 1
Add your state rates
Each state where you collect, with the rate you set for it.
- Step 2
The customer signs up
On your hosted checkout, with a billing address in their state.
- Step 3
The invoice is raised
With the rate for their state, or no tax if they are exempt. The rate is kept on the invoice.
- Step 4
The renewal is charged
By card or ACH on your own payment gateway. A failed payment goes to recovery.
Money you can trace, cards you never hold
How we keep billing safeAn append-only ledger
Balances come from double-entry records. A correction is a new entry, so every figure traces back to the rows behind it.
PCI DSS SAQ-A scope
Card numbers go from the browser straight to your payment gateway. They never reach our servers or yours.
An audit log
Who changed what, from the dashboard or the API, with the values before and after.
SaaS sales tax questions
Read next
Raise a sales tax invoice in test mode
Add your state rates, bill a test customer in another state, and read the invoice before any real customer does.
