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Collect Taxes for US-based Businesses
Collect Taxes for US-based Businesses
Updated over a year ago

What Are the Rules Around Collecting Taxes?

How much you collect in taxes will come down to where you operate out of and whether that particular state charges tax on digital goods. There's some jargon around this when it comes to each state, so it's best to Google search something along the lines of "[State Name] tax laws on digital goods." Of course, if you want to make sure you are doing it right, a tax professional will be qualified to help you with it.

If you're concerned about collecting VAT, please refer to our VAT guide.

At this time, if you wish to collect US-based taxes, then increase your prices to account for the average sales tax, which is around 7%. Then on our checkout page, our Total section will mention that the total sum already includes taxes.

Calculate Tax Rates According to Your Users' Location

To know exactly how much you should be charging and paying taxes, you can export the Invoices report, which gives you access to your users' location information.

To export the file, navigate to the Sales tab, go to Invoices, then click on Export CSV. To download it, go to the Settings tab, click on Exported Files, then on the file you exported, click Download.

Sometimes it might take a couple of minutes for the exported file to appear under Exported Files because it is collecting the data from all users.

Once the CSV file has been downloaded, you will see that the table provided has information on the Card Issuer Country, Zip, Country, Region, and City. The data will help you know exactly where the user is buying your content and what needs to be paid in taxes.

If you'd like to see a tax-based integration with Uscreen, please submit a feature request.

Are Video-based Businesses Always Taxable?

Not every state taxes digital goods, but it's becoming more common as many states are seeing a substantial increase in revenue from digital goods, so it's best to check where your state is currently at in regard to digital tax legislation.

So How Much do I Actually Owe?

If you've discovered you need to collect sales tax, we recommend building it into the price you charge on your storefront. Uscreen doesn't add taxes to purchased products. Buyers are always charged the amount that you set, so taxes will need to be netted out of that total price.

If you set a subscription at $10, your buyers will always pay $10, and you receive around $9.41 after payment provider fees for every sale. In a state with a 10% tax rate, you should set aside $1 to later remit, which would leave you with $7.41. You can know exactly where your users reside by downloading the Invoices report.

If you're using PayPal, we will hold all funds for 30 days and then payout on the 1st of the following month. If you use Stripe, you are automatically sent this money whenever you choose to do a Payout. At the end of the year (or more frequently depending on your tax professional's advice), you should send the money that was collected as sales tax to your state's filing office. You can pay the taxes collected directly to each state or use a tax remittance service.

NOTE: From now on, you won't need to contact our support team to get the Sales by Location report that was previously provided. Instead, you will just need to download the Invoices report mentioned above which provides all the information given on the Sale by Location report.

Disclaimer: These are very general recommendations. We're not tax professionals here, and we can't be responsible for any losses or tax liabilities due to actions taken (or not taken) based on these recommendations. Again, always consult a tax professional when planning how to manage to collect taxes.

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