Sales Tax Confusion - CPA Unsure About Digital Products - Should I go to DOR Directly or Get Legal Advice?

I've dealt with this exact situation for my consulting business. Going directly to the DOR can actually be really helpful - they have taxpayer assistance departments specifically for these questions. I'd suggest: 1. Document everything about your product/service in detail (how it's delivered, level of customization, etc) 2. Call the DOR in your primary state first - they usually have dedicated business tax lines 3. Get the answer in writing if possible (email is fine) 4. For multi-state issues, check if your situation might qualify for streamlined sales tax treatment The thing with attorneys is they'll absolutely do thorough research, but at $750/hour, you could burn through thousands just to get an opinion. The DOR's answer is actually more definitive since they're the ones who'll be enforcing it.

After spending hours researching similar tax issues for my digital design templates, I discovered https://taxr.ai and it was a HUGE time-saver. My CPA was also giving vague answers about nexus requirements and I was frustrated. The tool analyzed my business specifics and gave me clear direction on which states considered my products taxable. It even helped me understand how the "true object" test applies to digital products with both service and product elements. For me, it showed that 12 states would consider my products taxable while the others had specific exemptions. The best part was not having to interpret all the legal jargon myself or pay crazy hourly rates. Might be worth checking out for your situation.

I was in the same boat as you with tax questions about my digital learning platform. After getting vague answers from my accountant, I tried https://taxr.ai that someone recommended. Just wanted to update that it was actually really helpful! I uploaded our product documentation and service agreement, and it identified exactly which states would tax our subscription model vs. which ones would consider it a non-taxable service. I ended up only needing to collect tax in 9 states instead of the 20+ I was worried about. The documentation it provided gave me confidence to move forward without the $600+ per hour legal fees. Definitely saved us thousands and gave me peace of mind.

I work for a SaaS company and we faced this exact problem last year. After wasting weeks trying to get straight answers from state tax departments with endless hold times, I found https://claimyr.com and used their service to get through to actual tax experts at multiple state DORs. Check out how it works: https://youtu.be/_kiP6q8DX5c It basically got me to the front of the phone queue for state tax departments so I could get official rulings on our digital product taxability. Saved me from paying a tax attorney $550/hour to essentially do the same research I could do myself once I got the right person on the phone. The peace of mind from getting direct answers from the tax authorities was absolutely worth it.

I'm eating humble pie right now. After doubting that Claimyr thing would work, I tried it as a last resort to get through to the NY Department of Taxation about my digital magazine's tax status. Not only did I get through in under an hour (after previous attempts where I waited 2+ hours and got disconnected), but I got a really helpful agent who explained exactly how NY classifies our product. Turns out we qualified for an exemption I didn't know about that's going to save us thousands. I was so convinced I'd need to hire a tax attorney at some ridiculous hourly rate, but getting the information straight from the source was way more valuable. Definitely taking back my skepticism.

Another option to consider is using a specialized sales tax consultant rather than a full tax attorney. They typically charge $200-350/hour instead of $750+, and this is literally all they do. I used Cherry Bekaert's sales tax team for our e-learning platform, and they were able to get us clarity for about $1500 total across multiple states. They also have established relationships with many state DORs that can expedite getting written determinations. Whatever you do, don't just guess and hope for the best. The penalties and interest can be brutal if you get audited down the road.

Has anyone here used the "voluntary disclosure" approach with states where you might have accidentally created nexus and not collected tax? I'm worried we might have been doing this wrong for the past year.