Sales tax glossary
What are digital goods for sales tax?
Digital goods are products delivered electronically, such as e-books, music, movies, apps and downloadable software. States treat them differently: some tax them like physical goods, some exempt them, and some tax only certain types, or tax permanent downloads but not subscriptions.
Example
A store sells a video game on disc and as a download. In some states both versions are taxable; in others only the disc is.
Why it matters for sellers
Digital sellers can reach customers in every state from day one, so nexus and taxability questions arrive early. Classify each product type separately rather than assuming one rule covers everything you sell.
Related terms
This definition is general information, not tax or legal advice. Rules vary by jurisdiction and change over time.
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