If you run a SaaS product, you’ve probably wondered: Do I need to collect sales tax in Florida? And what exactly are digital goods under Florida law? These questions matter because misunderstandings can cost time, money, or even lead to compliance issues. In this post, we’ll look at what the current rules are (as of 2025), what “digital goods” typically include, and what you should watch out for.

What the Florida Laws Say About SaaS

First things first: SaaS stands for Software as a Service—software you host, maintain, and deliver over the internet (cloud, browser-accessed, etc.).

Here’s what Florida’s position is as of now:

• Florida does not impose sales tax on SaaS delivered entirely electronically.
  
  
• SaaS is considered an intangible service rather than tangible personal property. That means if you're not delivering something physical (like a CD, USB, or other media), you’re likely exempt.
  
  
• If there is some tangible component—media, physical storage device—or if your product bundles physical goods, those physical components can trigger tax liability. 

So for many SaaS companies, if all distribution, updates, and maintenance happen online, and nothing physical is shipped, they won’t owe Florida sales tax on those sales.

What Counts as “Digital Goods” in Florida (2025)

“Digital goods” is a broad term, but Florida’s take is more precise. If you know what falls inside or outside of the definition, you’ll be better positioned to make sound decisions (or advise clients).

Here’s how Florida generally treats digital goods:

E-books, downloadable music or video, digital images, and online games

• Typically Included / Not Taxed: Usually not taxed, because they’re delivered electronically and do not involve tangible personal property.
  
  
• Taxable When: If delivered with a physical medium (e.g., shipped on a disk) or bundled with a tangible item.
  
  

Web-based applications/cloud software/subscriptions

• Typically Included / Not Taxed: Usually not taxed in Florida under current rules.
  
  
• Taxable When: If some part of the service includes the delivery of physical items, or if state law changes.
  
  

Custom software built to order vs prewritten/licensed software

• Typically Included / Not Taxed: Prewritten/licensed software may sometimes be more exposed in some states. In Florida, even cloud-accessed prewritten software is generally not taxed if there’s no physical component.
  
  
• Taxable When: If downloading/installing on a physical device, delivering a physical copy, or owning the media.

Also note: some “digital goods” or “digital services” may be taxed under other categories (for example, communications or data transmission taxes), depending on how the state defines them. But as of 2025, those are separate from Florida’s general sales tax rules on SaaS/digital goods. 

Why the Distinctions Matter

You may think these are just technicalities, but they really matter. Here’s why:

• Pricing strategy: If you need to collect tax, that affects what your customers pay. If not, you can advertise “tax-exempt” or simply avoid the complexity of remitting for those items.
  
  
• Compliance risk: If you assume exemption but actually deliver something physical or do a bundle that changes the status, you might owe back taxes, penalties, and interest.
  
  
• Record-keeping: You’ll need good documentation to support your claims of digital delivery and lack of tangible property. In case of audits, written policies, invoices, and contracts help.
  
  
• Potential changes: Laws evolve. States sometimes amend definitions, issue rulings. What is exempt today might become taxable next year. Keeping up is important.
  
  

What to Watch Out for

Even though Florida is favorable for many SaaS providers, here are risk factors and edge cases to watch:

• Bundles: If you sell SaaS + physical product or ship something to a user, that can change taxability.
  
  
• Media delivery: If software or digital content is delivered on physical media (disk, USB), then it’s usually taxable.
  
  
• Ownership vs access: If the customer obtains a permanent right of use (downloads, installs, keeps), that sometimes shifts the classification.
  
  
• Custom vs prewritten: Sometimes, custom software (tailored for a specific client) is treated differently in other states; in Florida, the key is whether there's any physical component or tangible property involved.
  
  
• Legislative or administrative changes: Stay aware of rulings from the Florida Department of Revenue or new bills that aim to tax digital services or digital goods. Even user-feel, widespread digital adoption can push policy shifts.
  
  

What You Should Do If You Provide SaaS or Digital Goods

If you’re running a SaaS business, here are steps to stay on safe ground:

1. Classify your product clearly: Is it delivered entirely online? Is there a physical component? Is the user just accessing the service, or downloading something?
   
   
2. Maintain documentation: Contracts, terms of service, and invoices that show how you deliver (electronically vs physically).
   
   
3. Review state rulings: For Florida, check whether any Technical Assistance Advisements or rulings have changed definitions.
   
   
4. Consult with tax professionals: Because even small differences matter (for example, in bundle content).
   
   
5. Monitor legal changes: Bills, proposals, or department interpretations that might tax previously exempt services.
   
   

The Bottom Line

For 2025, the good news is: most SaaS providers delivering their services fully online, with no physical product involved, are not required to charge Florida sales tax on their SaaS or digital goods. Florida’s laws treat these as intangible services, which are generally exempt.



But “most” is not “all.” If you have bundles, deliver physical media, or give the customer more than just access (like downloads, ownership of software, etc.), you may cross the line into taxable territory.

Thinking Ahead

Since tax statutes and administrative guidance can change, it’s smart to build flexibility into your processes. Pricing may need adjusting, your terms of service may need boilerplate language about how you deliver, and your accounting must track whether sales are taxable or not.

If you’d like help figuring out whether your specific SaaS product is subject to Florida sales tax—or if you want to make sure your contracts and invoices build in the right protections—drop us a line at Sela Tax & Accounting LLC. We’d be glad to review your setup and help you stay compliant without unnecessary costs. You can reach us via our website:selatax.com.