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Contact Cloud: Settings
Frequently Asked Questions: Sales Tax
Frequently Asked Questions: Sales Tax
Written by Julie Jackson
Updated over a week ago

What states are you charging taxes in? 

  • Contact Cloud will collect and remit applicable taxes in states wherein it has a physical or economic presence as determined by the applicable state nexus rules.

  • Beginning May 2020, Contact Cloud will be charging applicable taxes for customers with service addresses in the state of Massachusetts.

What if my business is based outside of the United States?

  • If you consume Contact Cloud services outside of the US, you are not subject to state transaction taxes. This determination is based on the service address you have provided for your account.  

Why are you doing this? 

  • If, per nexus determination, Contact Cloud is determined to have economic or physical presence in a state or locality, and it directly sells services to someone located in that state or locality, then Contact Cloud is required to collect and remit applicable transaction taxes.  

  • The Wayfair Supreme Court decision in 2018 has led to a shift in state taxes.  Previously, most states only taxed sales by businesses with a physical presence in the state. Now, economic activity in a state (“economic nexus”) can trigger a transaction tax collection obligation. Economic nexus is based entirely on sales revenue, transaction volume, or a combination of both.  

Will I get an estimate of what my taxes will be?

  • There is no way to provide an accurate tax estimate in advance. The taxes assessed on the Contact Cloud products you are using could change monthly depending on varying reasons, such as changes in state or local tax laws where you consume our services and/or changes in applicable tax rates.

  • We will be providing a detailed breakout of your taxes in your account billing reports after taxes are calculated and assessed on the 1st of each month. 

  • Not all of our services are taxable in each state. 

  • The detailed breakout in your billing reports will show the taxes you paid by product. 

  • In general, the tax rates in most states for transaction taxes range from 5-14%. 

  • You will find any applicable taxes on each invoice provided by Contact Cloud.

What are transaction taxes?

  • Transaction taxes are taxes that states and localities impose on the sale of a products and services.  These taxes may be assessed at the state, county and municipal jurisdictional levels and can include sales taxes, excise taxes, communications services taxes, and utility user’s taxes.  Each jurisdiction will treat Contact Cloud's products differently, and these jurisdictions will have different regulations on what products and services are subject to various transaction taxes.

How are transaction taxes determined?

  • Transaction taxes imposed on Contact Cloud's products and services are dependent on where you consume our products and services, which is determined by your “service address.”  We use the billing address that you have provided to us as your default service address unless you provide an alternative address. 

  • If your billing address is not where you consume Contact Cloud products, you can update your service address in your account by logging into our customer portal, contacting one of our chat agents or emailing us at [email protected]

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