Digital Products Sales Tax by State 2026 Calculator

Digital products sales tax by state 2026 covers ebooks, music downloads, downloaded software, and streaming media. About 29 states tax at least one category of digital goods; the rest exempt them. Streamlined Sales Tax (SST) member states use uniform digital goods definitions, but several non-SST states (CA, FL, MA) carve out different rules.

What Counts as a Digital Product

The Streamlined Sales Tax (SST) Agreement defines three core digital categories: digital audio works (music, ringtones, audiobooks), digital audiovisual works (movies, TV episodes, video courses), and digital books (ebooks). Downloaded software and SaaS are taxed under separate definitions in most states. Streaming services (Netflix, Spotify) are taxed under digital goods rules in about 25 states; some states (Florida, Maine, Pennsylvania) apply a separate Communications Services Tax or Amusement Tax to streaming.

States That Tax Digital Goods in 2026

Tax all three SST categories: Alabama, Arizona, Arkansas, Connecticut, DC, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming. Tax only downloaded software: California (only when on tangible media), Massachusetts, Michigan, New York. Exempt all digital goods: Colorado, Florida, Georgia, Illinois (Chicago Amusement Tax hits streaming separately), Missouri, Virginia, Oklahoma (partial). Maryland is unique — it added a Digital Advertising Gross Revenues Tax targeted at big tech firms.

SST Member States vs Non-SST

SST member states (24 full members in 2026) use a uniform definition of digital goods and uniform sourcing rules. They make multi-state compliance easier — a single SST registration covers all SST states. Non-SST states (CA, FL, MA, NY, TX, PA, IL, NJ, others) each have their own definitions and registrations. Texas, for example, considers downloaded software a Taxable Information Service. Pennsylvania has Digital Goods covered by a separate 2016 statute. New York taxes downloaded software but exempts ebooks. California exempts almost all electronically delivered products including downloaded software (the rule is software is only taxable when delivered on tangible media like a USB stick).

Common Digital Products Sales Tax Mistakes

(1) Assuming digital = exempt — 29+ states tax digital goods as of 2026, including most SST member states. (2) Confusing software with SaaS — downloaded software is taxed differently than hosted SaaS. CA exempts downloaded software (when not on physical media), NY taxes it. (3) Missing streaming-specific taxes — Chicago's 9% Amusement Tax catches Netflix and Spotify, Florida's Communications Services Tax catches streaming. (4) Ignoring SST sourcing — digital products are sourced to the customer's billing address. Use the customer-on-file address, not the IP geolocation. (5) Forgetting EU/Canada VAT/GST — non-US digital sales need VAT-MOSS (EU) or GST/HST (Canada) registration once you cross local thresholds (€10K for EU pan-EU, CAD $30K for Canada).

Last updated May 2026. Sources: Streamlined Sales Tax Governing Board, individual state DOR rulings, Texas Comptroller, New York Department of Taxation and Finance, California State Board of Equalization, Maryland Digital Advertising Gross Revenues Tax statute.