Why does Twilio have to assess state sales taxes?
If, per Nexus determination, Twilio is determined to have a physical presence in a state or locality, and it directly sells services to someone located in that state or locality, then Twilio is required to collect sales taxes on behalf of that state.
How are sales taxes determined?
- Your Service Address: Sales taxes are determined based on your service address, which is your business’ physical address (headquarters) from where you purchase Twilio services. Twilio uses the billing address that you have provided to us as your service address. So, if your billing address is not the physical address for your business, click on the ‘Edit Company Info’ button on your Twilio Payment History Page to update your service address.
- Purchase Type: Each state has its own method to determine whether taxes are owed for purchasable goods and/or services and at what rate.
Will Twilio be charging sales taxes for all states?
Per state tax laws, Twilio is only liable to charge sales taxes for states in which we have a “physical presence” as determined by the applicable state rules. Twilio will currently be collecting sales taxes for the following states:
- District of Columbia
- New York
Twilio expects that the above list of states will continue to grow as we expand our presence throughout the United States.
Please note: If you or the business you have registered with Twilio is located in another jurisdiction than the states mentioned above, you should be self-reporting sales taxes to your local government for services purchased from Twilio.
How does Twilio know how much to charge?
Because tax laws are regularly changing, we have chosen to work with a third party sales tax business that focuses solely on local and state tax laws. Twilio routes all usage through this business to calculate sales taxes for which you will be charged.
How will I know how much I owe in sales taxes each month?
You will see a new sales tax line item in the usage summary page of your account portal if you or your business is located in a taxable locality (see example below). Please note you will not be able to see the total amount of sales taxes owed until they are assessed on the first day of the month for the previous month’s usage.
What if my business is tax exempt?
If you or your business is a reseller, 501(c)3 organization or is in possession of a state specific tax exemption certificate please email a copy of the certificate to TaxHelp@Twilio.com along with your AccountSID. Once your certificate is received, Twilio will verify your certificate and update your account accordingly. Please note that even if you have a resellers or exemption certificate you may not be exempt from all taxes in every jurisdiction. Please review the below guidelines regarding reseller and exemption certificates.
State Level Taxes
- In order for you or your business to be exempt from taxes, you will need to provide Twilio with a reseller certificate for the state you would like to claim tax exemption status in.
- An IRS 501(c)3 letter does not constitute an exemption certificate for state and local purposes.
Federal Level Taxes
- SaaS services are not taxed at the federal level.