SaaS companies can safely use SaaS marketing tools to find new customers in California. After all, you don’t have to register for a sales tax permit in this state.
State law states that if you simply allow your California customers remote access to your SaaS software, you don’t need to register for a sales tax permit and collect sales tax in California.
Selling or leasing pre-written software is not a taxable transaction if the software is transferred by remote telecommunications means from the seller’s place of business to or through the buyer’s computer, and the buyer does not take possession of any tangible personal property, such as a storage medium, in the transaction. Similarly, the sale of a pre-written program is not a taxable transaction if the program is installed by the seller on the buyer’s computer, unless the seller transfers ownership or possession of the medium, or the installation of the program is part of the sale of the computer.
Keep in mind, however, that if you also offer tangible personal property to your customers along with your SaaS product, it may be taxable. For example, if you offer a flash drive or a tangible instruction manual.
