Understanding the U.S. Sales Tax Update to Atlassian’s Invoicing System

To ensure compliance with local tax regulations, Atlassian is updating its sales tax collection process in the US

Certain factors determine sales tax applicability, and some businesses may be eligible for sales tax exemption with proper certification. Here, we’re detailing the criteria to help you better understand if and how the Atlassian invoicing system update regarding U.S. sales tax impacts your company. You can also find additional taxing information on the  Atlassian Purchasing & Licensing FAQ page.

What factors determine application of sales tax?

U.S. sales tax is applied to orders where the customer sold-to address is located in one of the 35 U.S. states and territories identified as taxable in the new Atlassian purchasing portal. For transactions in the legacy billing system, US sales tax eligibility will be determined based on the address of the technical contact.

If a Reseller or Partner is in a taxable U.S. state or territory but the customer isn’t, does U.S. sales tax apply?

No. The customer’s location dictates U.S. sales tax applicability. The sold-to address triggers taxation, not the billing address of the Reseller or Partner.

Which U.S. states and territories are taxable?

A total of 35 U.S. states and territories are affected:

*Puerto Rico is now recognized as a U.S. state/territory and will be taxed accordingly

**General Excise Tax in Hawaii

What happens if orders are taxed but should be tax exempt?

Generally, if valid exemption documentation hasn’t been provided to Atlassian, U.S. sales tax will be applied to all taxable orders.

If you can supply valid exemption documentation covering the period of the purchase, contact E7 Solutions to arrange for the refund of your purchase within 30 days of payment. Refunds outside of the refund policy period are handled by your local state tax or revenue authority.

E7 Solutions Can Help Navigate Atlassian U.S. Sales Tax Updates

With these U.S. sales tax updates, being properly set up and documented in the Atlassian invoicing system is imperative to ensure timely and seamless service.

Where available, Atlassian recommends providing blanket certificates (to cover all orders) that remain in place until revoked in writing or by a tax authority. Links to the appropriate issuing authorities are provided in the table of taxable U.S. states and territories above.

As your trusted Atlassian partner, E7 Solutions is happy to answer questions, help confirm the accuracy of information you have on file with Atlassian, and guide you through applying for or obtaining a tax exemption certificate. Contact our team today!