Houzz Pro SaaS Tax FAQ

Frequently Asked Questions: Sales Tax on Houzz Pro Subscriptions

Why am I being charged sales tax now?
Your subscription was recently updated to include access to our business management software solutions including lead management, estimation builder, and more, at no additional cost.

Houzz is legally required to collect sales tax in any state where Software as a Service (SaaS) is taxable, unless otherwise exempt.

What is the value of the SaaS taxable portion of my subscription?
While we provide SaaS at no additional cost to you, Houzz must assign a fair market value for sales tax purposes. Our business management software solution is valued at 30% of your total subscription cost, capped at $149. The rate of tax varies based on your billing address and state and local tax ordinances which determines the total tax rate. Houzz itemizes the price of SaaS and the portion not related to SaaS so the total offering is not commingled, and 100% of the SaaS price is subject to tax.

Please note in the state of New Mexico and Hawaii, the entire price is taxable unless otherwise exempt.

In which states is SaaS taxable?
As of June 2, 2020, SaaS is taxable in the following states: Arizona, District of Columbia, Hawaii, Louisiana, Massachusetts, New Mexico, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia.

Where does state law prescribe that SaaS is taxable?
Here are the relevant State Revenue Statutes which require Houzz to collect sales tax on your Houzz Pro subscription.

I’m sales tax exempt. Do I still need to pay?
If you are a person/organization that is sales tax exempt by your state from your purchases and believe you were charged tax in error, please email a copy of your completed sales tax exemption document to your account manager or clientsupport@houzz.com.

Who do I contact for additional information?
We recommend consulting your local tax authority for the specific tax laws and rates in your area

Still need help?