Whether US sales tax applies to the presets, ebooks, courses or memberships you sell depends on the buyer's state, and the rules differ sharply: Washington's Department of Revenue says sales or use tax applies to all digital products however they are accessed, while California's CDTFA says its tax on digital products starting January 1, 2027 covers prewritten software but not ebooks, music or video. You only collect where you have nexus, through physical presence or a state's economic threshold, and often not at all when a marketplace or merchant of record collects for you.
What South Dakota v. Wayfair changed for online sellers
Until the Supreme Court decided South Dakota v. Wayfair in 2018, a state could not make a seller with no physical presence collect its sales tax. The Court overruled that physical presence rule in a case about a South Dakota law reaching sellers that, according to the opinion, delivered more than $100,000 of goods or services into the state each year or engaged in 200 or more separate transactions there. Many states have since enacted economic nexus laws of their own, which is why a creator in one state can owe registration in another without ever visiting it.
Those rules keep moving. South Dakota's own remote seller bulletin, dated August 2025, now sets the test at more than $100,000 of gross sales into the state in the previous or current calendar year, with no transaction count. The Streamlined Sales Tax Governing Board's remote seller state guidance warns that some states measure sales or transactions and others sales and transactions, that the sales figure may be gross, retail or taxable sales, and that many states count non-taxable sales towards the threshold. It also says that physical presence in a state means you must register there regardless of the amount, which for a creator usually means their home state.
Decision tree: who collects, you or the platform?
Start with where the buyer pays, because that settles most of the question before any state rule comes into it.
- Merchant of record checkout? If the platform sells to the buyer in its own name, it handles the tax. Gumroad's help article on sales tax on Gumroad says it now acts as merchant of record for all sales and handles collection and remittance worldwide. Keep its tax reports with your books and move on to income tax.
- Marketplace that collects in some places? Patreon's article on its sales tax requirements says laws require online marketplaces like it to add sales tax to some member payments, lists the states where it collects, and warns that some jurisdictions do not require or allow it to collect, so you may have your own obligations there.
- Your own store or checkout? You are the seller. Shopify's US taxes guide says it helps automate charging tax but does not remit or file for you unless you use Shopify Tax with automated filing.
- Your home state. If your product is taxable where you live and work, you generally need to register there whatever your sales, because you have a physical presence.
- Every other state. Track direct sales and transaction counts by buyer state each month and compare them with that state's threshold, using the state's own definition of which sales count.
- Do marketplace sales count? The SST marketplace seller chart shows states split on whether sales through a marketplace facilitator count towards a remote seller's threshold, and on whether a seller who only sells through a collecting marketplace must still register.
- Is the product taxable there? Only now does product taxability matter. Use the lookup worksheet below for each state where you cross a threshold.
- Register before collecting. The Streamlined registration page says you are responsible for collecting and remitting from your registration date, so register first, then switch on collection at checkout.
How official pages classify typical creator products
States do not use the same words for the same things. The table pairs common creator products with the question to ask a revenue department and an example of how an official or platform page answers it.
| Creator product | Question for the state | Example from an official page |
|---|---|---|
| Ebooks and downloadable PDF guides | Are digital books taxed, and is a PDF workbook a book? | Pennsylvania lists e-books as taxable on its digital products page; California excludes digital books from its new definition |
| Recorded courses and tutorial libraries | Are streamed or downloaded videos digital goods in this state? | Washington taxes downloaded and streamed digital goods; California excludes digital audiovisual works |
| Live workshops, coaching calls and webinars | Is real-time interaction a taxable service here? | Washington made live presentations subject to retail sales tax from October 1, 2025, then added exclusions from July 1, 2026 |
| Editing presets, templates and plug-ins | Is the file prewritten software or a digital good? | California will tax prewritten software, and CDTFA's definitions page describes software as coded instructions designed to make a computer perform a task |
| Paid memberships with posts and community access | Which benefit inside the tier is the taxable one? | Patreon's tax article sorts benefits into types and taxes a whole tier if any benefit is taxable and you have not used its advanced settings |
| Support-only payments and pay-what-you-want amounts | Is a voluntary amount above the tier price treated like a tip? | Patreon says several jurisdictions treat such amounts as non-taxable but others cannot |
| Digital art and photo downloads | Are digital images taxed as digital goods? | Pennsylvania lists photographs as taxable; California excludes digital visual works |
Pennsylvania's digital products guidance applies Act 84 of 2016, which charges the state's 6% sales and use tax on products delivered electronically, digitally or by streaming, and it sources the sale to the customer's billing address on file. The CDTFA's tax guide for digital products explains that Senate Bill 122 expands California's definition of tangible personal property from January 1, 2027 to include digital products, which is why a creator selling Notion templates or editing plug-ins into California should get a written answer on whether their file counts as software.
State taxability lookup worksheet
Keep one row per state where you sell directly. The four filled rows show the level of detail to record; add the date you checked each page, because these pages change.
| State and department | What its page says about digital products | Remote seller test to record | Checked |
|---|---|---|---|
| Washington Department of Revenue | Sales or use tax applies to digital goods, digital codes and digital automated services, whether downloaded, streamed or by subscription | Look up the current figure on the department's remote seller guidance and note whether it counts gross or retail sales | 1 October 2026 |
| Pennsylvania Department of Revenue | Video, music, books, apps, games, photographs and canned software delivered electronically are taxable at 6% | Record the department's remote seller rule; note that sales delivered outside Pennsylvania are not taxed there | 1 October 2026 |
| California CDTFA | From January 1, 2027, prewritten software and SaaS become taxable; ebooks, audio, video and digital art are excluded | The SST chart, dated January 2023, lists combined sales over $500,000; confirm with CDTFA | 1 October 2026 |
| South Dakota Department of Revenue | Products transferred electronically are taxed as tangible personal property, for temporary or permanent use | More than $100,000 of gross sales into the state, per the August 2025 bulletin | 1 October 2026 |
| Your next state: name the department | Paste the exact sentence about your product type, with the page address | Threshold, whether it counts transactions, and whether marketplace sales are included | Date you read it |
The SST's state taxability matrix is a faster first stop for its member states: each state records how it treats defined products, including digital ones, with a citation to its own law, and sellers relying on the matrix are relieved from liability for errors in that state-supplied data.
Registering, collecting and filing
In Streamlined member states, the Streamlined Sales Tax Registration System lets you register for any or all members in one application, and the board's page on free certified service provider services says a qualifying remote seller can have a certified provider calculate tax, file returns and remit without charge in those states. The qualifying criteria include having no fixed place of business in the state for more than 30 days, less than $50,000 of property and of payroll there, and less than 25% of your total property or payroll there, measured over the 12 months before registering.
Collecting correctly also depends on where each sale is sourced. Washington's page sets out a hierarchy that starts with where the buyer receives the product and falls back to addresses in your records or captured at checkout, while Pennsylvania uses the billing address on file, so make sure your checkout stores a billing address for every digital sale. Keep the tax collected in its own ledger account rather than counting it as income, as our bookkeeping system for creators sets up, and keep the product and checkout decisions themselves in our digital products checklist.
Where official pages disagree or have aged
- Washington advertising services. The department's digital products article still describes online advertising services as subject to business and occupation tax rather than sales tax, under a banner warning that some activities it discusses became taxable on October 1, 2025, and its separate advertising services page confirms they are now subject to retail sales tax. Creators selling sponsored content or ad placements to Washington businesses should ask how that page applies to them.
- Thresholds in summary charts. The SST remote seller chart describes itself as current to January 11, 2023, and South Dakota's August 2025 bulletin has since dropped the transaction count that featured in Wayfair. Use each department's own page.
- The same phrase, different scope. “Digital products” covers books, music, video and photographs in Pennsylvania but only software under the California law taking effect in 2027, so never copy one state's answer to another.
- Open litigation. Washington's services page notes ongoing legal challenges to the 2025 changes, but says affected taxpayers must still report, collect and remit under current guidance.
Limitations of this sales tax guide
This is general information from state revenue departments, the Streamlined Sales Tax Governing Board, the Supreme Court opinion and platform help pages, checked on 1 October 2026. It covers four states in detail out of the many that tax sales, does not address local rates, physical merchandise, use tax you owe on your own purchases or income tax, and cannot decide how a state will classify a specific file you sell. CDTFA recommends getting answers in writing, and that is good practice everywhere: ask the department, or a CPA or enrolled agent who handles multistate sales tax, using our guide to choosing a creator accountant. For the federal income tax forms platforms send you, see our W-9 and 1099 guide.