Whether website design carries sales tax depends on your state. Three state tax departments have written their answer down, and the three answers are not the same. Here is what each one says, on its own site, so you can go and read it yourself.
This is not legal or tax advice. The only people who can answer for your business are your accountant and your own state revenue department. What follows is what three of those departments have put in writing, so you know what you are looking at when you get there.
Texas taxes a website as data processing
Texas publishes a list of the services it taxes. The Texas Comptroller of Public Accounts puts that list in Publication 96-259, Taxable Services, dated 01/2026, and the publication says the term is defined in Tax Code Section 151.0101 to include 16 broad categories of services.
Data processing is one of those categories, and the examples listed under it include web hosting and web site creation and maintenance.
The same page says: “Twenty percent of the charge for data processing services is exempt from tax.” So tax is figured on 80 percent of the bill, not all of it.
The Comptroller’s Publication 94-127, Data Processing Services are Taxable, dated 03/2022, tells the seller to “Collect the 6.25 percent state tax (plus any local taxes) from your customer on the charge for your taxable service.” Its list of taxable internet services includes “creating web (home) page and providing server space.”
Run that on a $2,000 build. Twenty percent comes off, so tax is figured on $1,600. State tax at 6.25 percent is $100. Local tax sits on top. Both numbers are on the Comptroller’s own site, and you can check them in about two minutes.
Washington started taxing website work in October 2025
Washington passed a law that names the work outright. The Washington State Department of Revenue issued a special notice titled “Information technology, website, and software development services now subject to sales tax” on July 30, 2025. It says: “Beginning Oct. 1, 2025, businesses must collect retail sales tax on information technology, website, and software development services.” The law behind it is Engrossed Substitute Senate Bill (ESSB) 5814, Chapter 422, Laws of 2025.
The department’s Custom website development page defines the work as “the design, development, and support of a website provided by a website developer to a customer,” and says those services “do not include web hosting or domain name registration services.” That page carries no update date.
Washington is still settling the details. Its interim guidance statement on custom website development services under ESSB 5814, dated September 12, 2025, says it “will remain in effect until the department issues final guidance, cancels this interim statement, or new legislation is enacted.” So the wording you read today can be replaced.
The start date matters if your project ran across it. A quote written in August 2025 for work finished in November 2025 is not the same tax question as either one on its own.
Connecticut wrote websites back out of its rule
Connecticut taxes computer services, then carves websites out again.
The Connecticut Department of Revenue Services published Policy Statement 2006(8), Sales and Use Taxes on Computer-Related Services and Sales of Tangible Personal Property, issued March 23, 2007. It says taxable computer and data processing services “do not include services rendered in connection with the creation, development, hosting, or maintenance of all or part of a website.” The same document says computer and data processing services “became taxable at 1% effective July 1, 2001.”
Here is the limit on that source, and it is a real one. The page carries a note from the department itself: “This publication has not been updated to accommodate the recent legislative changes.” A 2007 policy statement tells you what the rule was. It does not prove what the rule is today. Treat it as a reason to make a phone call, not as an answer.
What to check on your own invoice
The seller collects sales tax, not you. The Texas instruction quoted above is written to the seller. Your job is to read the bill and ask a question when a line looks odd. None of this is legal or tax advice either, so take anything that looks wrong to your accountant and to your own state’s revenue department.
- Is the fee split into parts? Washington treats design, development and support one way and hosting and domain names another, and one lump line hides that, so ask for the bill broken out.
- Is there a tax line at all, with a rate next to it? A tax amount with no rate shown is worth a question.
- Does the rate match your state? Texas adds local tax on top of its 6.25 percent state rate.
- Was the quote written before a rule changed? Washington’s start date was October 1, 2025. Ask which rule the seller is working from.
If two quotes are broken up differently, sort that out before you worry about tax at all. Putting three website quotes on the same footing comes first, and the tax question gets easier once the lines match up.
One more thing people mix up constantly. Sales tax and income tax are two different bills. Paying sales tax on a build has nothing to do with whether you can write the build off, which is a separate question about deducting a new website.
What to do next
Four steps, in order. None of them costs anything.
- Search your state name plus “taxable services” and find the page on the revenue department’s own site. Not a blog about it. The department page.
- Look for a list. See whether data processing, computer services, or website development shows up on it.
- Send your web company one written question: do you collect sales tax in my state, and on which lines of my invoice.
- Take the answer to your accountant before you dispute anything.
And one honest note to close on. Do not pick a website company on sales tax. A few percent on one invoice will not decide whether the site brings you work. The build and the upkeep will. If you want to see how a fee splits into parts before tax ever enters the picture, the monthly plans list what each one covers, and the website build page names the work behind it.