Digital services and advertising services subject to 6% sales tax
The US state of Maryland confirmed the 6% sales tax levy on a range of digital services, including:
- Streaming films and music,
- ring tones,
- e-books and audio books,
- online newspapers and
- cable, satellite and pay-per-view television programming.
Most US states with a sales tax – around 40 – also impose their indirect tax on digital services, too.
Advertising services
A new 2021 law has now been enforced to impose sales tax on the annual gross revenues on a certain digital advertising services. Generally, only providers with revenues above $1million in Maryland will be liable.
The legislation had been blocked by the state governor; but the legislature has now overruled.
US Sales Tax rates and selling thresholds
| State | State sales tax rate | Remote seller annual thresholds | Digital services taxable? | |||||
| $ threshold | Transactions threshold | |||||||
| Alabama | 4.0% | 1 Oct 2018 | $250,000 | Yes | ||||
| Alaska | 0% | - | n/a | No state-wide tax | ||||
| Arizona | 5.6% | 1 Oct 2019 | $100,000 | - | Yes | |||
| Arkansas | 6.5% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| California | 6.0% | 1 April 2019 | $500,000 | - | No | |||
| Colorado | 2.9% | 1 Dec 2018 | $100,000 | - | Yes | |||
| Connecticut | 6.35% | 1 Dec 2018 | $100,000 | 200 transactions | Yes | |||
| Delaware | 0.0% | - | n/a | No state sales tax | ||||
| Florida | 6.0% | 1 July 2021 | $100,000 | - | No | Communications Tax. E-books exempt | ||
| Georgia | 4.0% | 1 Jan 2019 | $100,000 | 200 transactions | No | |||
| Hawaii | 4.0% | 1 July 2018 | $100,000 | 200 transactions | Yes | General Excise Tax | ||
| Idaho | 6.0% | 1 June 2019 | $100,000 | Yes | Software exempt | |||
| Illinois | 6.25% | 1 Oct 2018 | $100,000 | 200 transactions | No | |||
| Indiana | 7.0% | 1 Oct 2018 | $100,000 | - (since Jan 2024) | Yes | |||
| Iowa | 6.0% | 1 Jan 2019 | $100,000 | - | Yes | |||
| Kansas | 6.5% | 1 July 2021 | $100,000 | - | No | |||
| Kentucky | 6.0% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Louisiana | 4.45% | 1 July 2020 | $100,000 | - (since Aug 2023) | Yes | |||
| Maine | 5.5% | 1 July 2018 | $100,000 | - (since 2022) | Yes | |||
| Maryland | 6.0% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Massachusetts | 5.6% | 1 Oct 2018 | $100,000 | No | ||||
| Michigan | 6.0% | 30 Sep 2018 | $100,000 | 200 transactions | No | |||
| Minnesota | 6.875% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Mississippi | 7.0% | 1 Sep 2018 | $250,000 | - | Yes | |||
| Missouri | 4.225% | 1 Jan 2023 | $100,000 | - | No | |||
| Montana | 0.0% | - | n/a | No state sales tax | ||||
| Nebraska | 5.5% | 1 April 2019 | $100,000 | 200 transactions | Yes | |||
| Nevada | 4.6% | 1 Oct 2018 | $100,000 | 200 transactions | No | |||
| New Hampshire | 0.0% | - | n/a | |||||
| New Jersey | 6.625% | 1 Nov 2018 | $100,000 | 200 transactions | Yes | |||
| New Mexico | 5.0% | 1 July 2019 | $100,000 | - | Yes | |||
| New York | 4.0% | 21 July 2018 | $500,000 | 100 transactions | No | |||
| North Carolina | 4.75% | 1 Nov 2018 | $100,000 | 200 transactions | Yes | |||
| North Dakota | 5.0% | 1 Oct 2018 | $100,000 | - | No | |||
| Ohio | 5.75% | 1 Aug 2019 | $100,000 | 200 transactions | Yes | |||
| Oklahoma | 4.5% | 1 Nov 2019 | $100,000 | - | No | |||
| Oregon | 0.0% | - | n/a | No state sales tax | ||||
| Pennsylvania | 6.0% | 1 July 2019 | $100,000 | Yes | ||||
| Puerto Rico | 10.5% | 1 Jan 2021 | $100,000 | 200 transactions | Yes | |||
| Rhode Island | 7.0% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| South Carolina | 6.0% | 1 Nov 2018 | $100,000 | - | No | |||
| South Dakota | 4.5% | 1 Nov 2018 | $100,000 | - (since Jul 2023) | Yes | |||
| Tennessee | 7.0% | 1 July 2019 | $100,000 | - | Yes | |||
| Texas | 6.25% | 1 Oct 2019 | $500,000 | - | Yes | Only if physcial equivilaent is taxable (e.g. books) | ||
| Utah | 4.7% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | |||
| Vermont | 6.0% | 1 July 2018 | $100,000 | 200 transactions | Yes | |||
| Virginia | 4.3% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| Washington | 6.5% | 1 Oct 2018 | $100,000 | - | Yes | |||
| Washington, DC | 6.0% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | |||
| West Virginia | 6.0% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | Streaming services only | ||
| Wisconsin | 5.0% | 1 Oct 2018 | $100,000 | - (since 2021) | Yes | |||
| Wyoming | 4.0% | 1 Feb 2019 | $100,000 | - (since 2024) | Yes | |||
