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Q:  How are sales of digital products, digital codes, and remote access software sourced?

A: 

The standard sourcing rules from the Streamlined Sales and Use Tax Agreement (SSUTA) apply to the sourcing of digital products, digital codes, and RAS.  (See section 704 of ESHB 2075.)

Under SSUTA, sales of digital products digital codes, and RAS are sourced the same as other states.  Sales are sourced according to the following hierarchy:

  • The seller's place of business if the purchaser receives the digital product at the seller's place of business;
  • If not received at the seller's place of business, the location where the purchaser receives the digital product, digital code, or RAS;
  • If the location where the purchaser receives the digital product, digital code, or RAS is not known, the purchaser's address available in the seller's business records;
  • If no address is available in the seller's business records, the purchaser's address obtained at the time of sale (e.g. purchaser's payment instrument); and
  • If no address is obtained at the time of sale, the address where the digital product, digital code, or RAS is first made available for transmission by the seller.

The majority of such sales will likely be sourced according to the buyer's billing address since most businesses will not know the actual location of the buyer at the time of the purchase.

More information
More information about digital products
Engrossed Substitute House Bill (ESHB) 2075
Substitute House Bill (SSB) 2620
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