Below, you will find answers to some common questions regarding Alchemer's collection of Sales Tax.
Why do we have to pay sales tax? What changed?
Software As A Service (SaaS), may be subject to certain tax rulings across jurisdictions in the United States. A jurisdiction can include a state, city, and even a county. Each jurisdiction has the ability to establish its own tax rulings. When Alchemer provides these SaaS based services, and in some instances other services like training, we are required by law to collect the applicable sales tax in that jurisdiction. The following jurisdictions require Alchemer to charge tax:
- AR, CT, KS, KY, ME, MD, MA, MI, MN, NY, PA, TN, TX, UT, WA, WI
- CO (City of Boulder only)
- Washington DC
- Canada (GST)
What is the financial impact? What will this cost?
Sales tax is added as a % of the purchase price of the service being invoiced, rates vary by state and jurisdiction.
Do Non-Profit Organizations have to pay sales tax? If yes, is the rate the same as other accounts?
Non-Profit Organizations are exempt from sales tax and are typically issued an EIN number from the government. Alchemer will require the non-profit organization's EIN number and certificate. If the EIN number is not valid for any reason, Alchemer will charge the customer for sales tax after the sale.
Do I have to pay sales tax? Can’t you just waive this cost?
Yes, you are subject to paying applicable taxes and it is not a cost that can be waived. Alchemer is required to remit the payment to the appropriate states. Alchemer worked with a third-party accounting firm (with extensive experience in tax governance) to gather the guidance needed to implement these changes.
Will you be charging VAT?
Yes, we will be charging Value Added Tax (VAT) when it is applicable. Alchemer is required by law to charge EU and UK companies (and individuals) VAT as required by each country. If an EU or UK company provides a VAT number, Alchemer is not required to charge VAT per current regulations.
Typically, all individual consumers will be charged VAT, unless they provide a valid VAT registration #.
What is Alchemer's VAT#?
The Alchemer VAT# is as follows:
GB-309 7393 78
What is the tax rate calculation based on? (city, county, state, zip, country etc.)
Tax calculations are based upon the billing address provided at the time of the sale. Each jurisdiction sets its own rates. Alchemer utilizes a software tool that specializes in taxes to provide the appropriate calculations. Jurisdictions may include State and local governments (City, County, etc.)
Which states will be impacted by this change?
Below is a list of jurisdictions requiring taxes for services that Alchemer is providing:
- AR, CT, KS, KY, ME, MD, MA, MI, MN, NY, PA, TN, TX, UT, WA, WI
- CO (City of Boulder only)
- Washington DC
- Canada (GST)
What if my business has multiple locations? Which location determines tax rate?
Tax rates are based upon the billing address provided and take into consideration all the jurisdictions requiring taxes for the services that Alchemer is providing.
Are non-SaaS services (programming, panel, etc.) taxed?
Each service type may be subject to sales tax. Tax rates do vary by jurisdiction and can be updated periodically by the tax jurisdiction.
Please reference the tax grid below for current taxability of Alchemer services by tax jurisdiction:
Services | |||||||
Jurisdiction | Pro Services | Panel Services | Training | SSL & Domain | SaaS | Phone Support | |
Washington D.C. | |||||||
Texas | (80%)* | (80%)* | |||||
Washington (State) | |||||||
City of Boulder (CO) | |||||||
Canada |
Denotes that the Alchemer service is taxable in that jurisdiction.
Denotes that the Alchemer service is exempt (not taxable) in that jurisdiction.
*Only 80% of the charges will be taxed at the state rate.
Why did this change? Were you not charging tax before?
Sales tax rules are always changing, and we are required to be compliant with state and local tax laws. Therefore, we periodically update our systems to ensure we are following all the required tax rulings.
What about add-ons to an existing account, are they taxed individually? (A single user added to existing acct. for example)
If we invoice a client in a taxable jurisdiction for taxable services, sales tax will be charged.