Why is sales tax being added to my subscription?
Beginning April 1, you may see sales tax added to your subscription invoice, below you’ll find answers to common questions about this change.
Sales tax applies to invoices issued on or after April 1. This change reflects recent updates to state and local tax laws that now require collection on certain services, including accounting and software-enabled services, in specific jurisdictions.
How is sales tax calculated?
Sales tax is calculated automatically based on:
- The billing address associated with your account
- Tax requirements in your area
Rates and rules vary by state and sometimes by local jurisdiction. If your state requires sales tax on our services, it will appear as a separate line item on your invoice.
If no state is entered in your profile, we will use the billing location currently on file.
How do I know if sales tax applies in my state?
Requirements differ by state and local jurisdiction.
The simplest way to check is to review your next invoice after April 1. If tax applies in your area, it will appear as a separate line item. For general reference on your state’s tax rules, you can visit: https://taxadmin.org/state-tax-agencies
Why is sales tax being applied now?
Over the past several years, more states have expanded their tax rules to cover digital services, SaaS products, and accounting or bookkeeping services.
To stay current with these requirements, we are now collecting and remitting sales tax in jurisdictions where it is required.
Will my price change?
Your base subscription price is not changing.
However, if your billing address is in a jurisdiction that requires sales tax on our services, you will see a new sales tax line item on your invoice starting April 1. The tax amount is calculated based on your billing location and will appear separately from your subscription fee.
Does this affect past invoices?
No.
Sales tax only applies to invoices issued on or after April 1.
Invoices issued before April 1 are not impacted.
Where can I find my invoices?
You can access your invoices directly in your account.
To view invoices and payment history:
- Log in to your account
- Navigate to Profile → Billing
How do I update my billing address?
You can review or update your billing address at any time in your account profile.
To update your billing address:
- Navigate to Profile and select edit
Then input your updated address and save:
If you update your address before your next invoice, sales tax will be calculated using the updated information.
What happens if I don’t update my billing address?
If no state is entered, we will use the billing location currently on file to determine applicable sales tax.
I’m tax-exempt. What should I do?
If your organization is tax-exempt, please contact our Support team and provide a valid tax exemption certificate.
Our team will review your documentation and update your account accordingly.
Call us at 888-760-1940 Ext. 2 to get started.
I thought my state (e.g., California) doesn’t tax SaaS. Why am I being charged?
The tax treatment of SaaS and related services varies by state and depends on how the service is categorized under that state’s tax code.
Because Bench combines software with professional bookkeeping, our services may be classified differently than pure software. Depending on the state, that could mean classification as:
- SaaS
- Cloud-based services
- Business process or outsourced services
These classifications can determine whether sales tax applies. We work with tax professionals to ensure we are collecting correctly based on current state and local guidance tied to your billing address.
For state-specific details, we recommend consulting your local tax authority: https://taxadmin.org/state-tax-agencies
What law allows this (e.g., Virginia, Colorado, etc.)?
Sales tax applicability is determined by individual state legislation and local regulations.
Many states, including Virginia and Colorado, have updated tax rules in recent years to expand taxation to digital and service-based offerings.
For the most current details on your state’s rules, you can visit your state tax authority’s website: https://taxadmin.org/state-tax-agencies
Can you provide a breakdown of why I’m being charged sales tax?
Sales tax is applied based on:
- Your billing address
- The type of services provided
- Tax requirements in your jurisdiction
It will appear as a separate line item on your invoice. For detailed questions or documentation needs, our team can help walk you through your specific case.
I have additional questions.
If you have any questions about how this affects your account, we’re here to help.
Call us at 888-760-1940 Ext. 2
Note: This message serves as advance notice of the upcoming change. If you have questions before April 1, please don’t hesitate to reach out.