Why does BetterUp, Inc. charge sales tax on its products and services?
Q: How does sales tax apply when I purchase BetterUp’s services?
A: At BetterUp, our platform and overall service is considered software as a service (‘SaaS’). This service is remote in nature and may be considered taxable in various jurisdictions. When our customers remit payment to us they may be required to pay us sales tax on our services depending on the jurisdiction.
Q: I thought sales tax was only for physical products. Why am I being charged sales tax for a software service?
A: Sales tax laws have evolved to include digital products and services, including Software as a Service (SaaS). Depending on the jurisdiction, these services can now be subject to sales tax, similar to physical products. Our company is required to adhere to these regulations and collect applicable sales tax on SaaS subscriptions and renewals.
Q: Why didn't I see sales tax charges before? Has something changed?
A: Regulatory changes and updates to tax laws may have occurred recently. Our company strives to remain compliant with these changes. As a result, you might now notice sales tax charges on your BetterUp service subscription, whereas they might not have been present before.
Assessment of Sales Tax on BetterUp’s Services (SaaS)
Q: How is sales tax calculated on SaaS?
A: Sales tax on SaaS is typically calculated based on the customer's location. Different jurisdictions have varying tax rates, so the amount of sales tax charged depends on where you are located. Our system automatically determines the appropriate sales tax rate based on your billing address and applies it to your subscription fee.
Q: Can you provide an example of how sales tax is assessed on BetterUp subscription?
A: Certainly! Let's say you're located in City A, where the total sales tax rate is 8%. If your monthly BetterUp subscription fee is $149, the sales tax would be 8% of $149, which amounts to $8. Therefore, your total bill for the month would be $160.92 ($149 subscription fee + $11.92 sales tax).
Locating Sales Tax Information on Your Receipt:
Q: Where can I find information about the sales tax on my BetterUp subscription?
A: The sales tax information related to your BetterUp subscription can be found on your billing receipt or invoice. This receipt will provide a clear breakdown of the subscription fee, the applicable sales tax amount, and the total amount charged.
Q: Is the sales tax amount shown separately on the receipt?
A: Yes, the sales tax amount is displayed as a separate line item on your receipt. This transparency ensures that you can easily identify the sales tax portion and understand how it contributes to your overall charges.
Q: Are sales tax charges applicable to all customers, regardless of their location?
A: Sales tax charges are determined by your billing address and the local tax regulations of that area. If your location's tax laws require the collection of sales tax on SaaS, then the charges will apply to your BetterUp subscription. As of September 15th 2023,states that are currently being charged sales tax include: Arizona, Connecticut, District of Columbia, Maryland, Massachusetts, New York, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Washington.
If you have further questions or concerns regarding sales tax on BetterUp services, please do not hesitate to reach out to our customer support team. We're here to help!