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I am trying to find if I need to charge sales tax with purchase of my app from the app store.

I am in NY and most of my customers and buyers are from NY as well. I am not sure what NY regulations are on digital goods / unboxed software.

What is the tax rate that I should charge?

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Yes, software is considered a tangible good in NY State and if you are based in NY state, you are required to collect and remit sales tax from purchasers in NY state.

The rate you would charge would depend on which sales tax jurisdiction the purchaser lives in, which makes compliance rather difficult. You could also just charge sales tax based on YOUR sales tax jurisdiction (rates are here) but as far as I know, this is not correct (but would probably never be challenged because rates are so similar across NY).

Source: I am the founder of a company that sells software and is located in NY and have been doing that for 15 years.

  • Thanks for great explanation, very accessible to someone new at this. Do you charge 4.5% or full 8.875% ? Reason I ask, I think I read somewhere that unboxed, downloadable software is 4.5% in NY (I could be wrong). Just for reference mine is an in-app product (app itself is free to download, but users unlock a small paid section) – AlexVPerl Aug 6 '15 at 20:07
  • @AlexVPerl I've never heard of a reduced rate for downloadable software in NY state. There might be, but I've never heard of that. – Michael Pryor Aug 6 '15 at 20:23
  • Thanks for previous feedback. Curious as to how do you handle sales taxes if the purchase is made from other states? With mobile apps this is common, but to paying sales taxes to all 50 states is just unreasonable. – AlexVPerl Apr 26 '16 at 15:59
  • Charge tax in the state where it is sold. State tax forms will deal with interstate tax recapture if it's relevant, though in many cases consumers ignore those provisions. – keshlam Jan 12 '17 at 13:46

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