ServiceTitan's tax guidelines

• Office employees

• Applies to all business types

• Applies to all trades

Sales and Use Taxes: Standard sales taxes—including but not limited to, Sales and Use Taxes, District Taxes, Transit Taxes, and so on—charged by your state and local governments.

The following telecom taxes and fees might apply to your purchase:

• 911 and 988 Taxes: Monthly fees collected to fund public safety services. These are based on units and vary depending on the jurisdiction.

• Federal Excise Tax: A federal excise tax is levied on certain communication services, which has existed in various forms since 1898.

• Federal Universal Service Fund (USF) and Federal Communications Commission (FCC) Regulatory Charge: The FCC requires telecommunications providers to pay into this fund. This supports affordable service in high-cost areas, schools, libraries, and FCC's own operations.

• State Universal Service Fund Charge: Similar to the federal fund, this recovers costs associated with state programs. Some states, including Texas, have their own universal service funds with separate charges.

• Right-of-way fees: Some municipalities charge telecommunication companies a fee for using public rights-of-way, which is often passed on to consumers.

• Other fees: Based on your jurisdiction, other taxes and fees include gross receipts tax, state excise tax and utility users tax.

The tax amount on your invoice is based on the purchased product or service, the taxing authority, and your ship-to address. ServiceTitan uses tax software to calculate tax based on all these factors.

In general, sales of ServiceTitan software don’t qualify for tax exemption since our customers are the end-users of our products. However, if you believe that your purchase qualifies for a specific tax exemption, you can submit your supporting documentation for review to taxinquiry@servicetitan.com.

Note: Any tax collected by ServiceTitan is passed directly to the applicable federal, state and/or local authority and does not constitute revenue for ServiceTitan.

ServiceTitan itemizes tax lines on invoices to inform you about the collected taxes—sales tax, telecom tax, and so on—and their jurisdictions—federal, state, county, local, and so on. Some ServiceTitan products qualify as telecommunication services and are subject to telecom taxes and fees. These taxes and fees vary by location and depend on the ServiceTitan product purchased. This is why you might see more tax lines on certain purchases.

Changes in tax laws or increases to tax rates in your jurisdiction often cause this. An address change on your account may also be a factor. Always keep your billing and shipping addresses current and accurately reflected on your invoice.

Some ServiceTitan products include telecommunication services. Telecommunication services often face a heavy tax burden, including sales tax and telecom taxes, which can involve "Tax on Tax." This practice applies multiple taxes and government fees to the total invoice, which may already include other taxes and regulatory surcharges.

For example, ServiceTitan’s Managed Technician product is a blend of software as a service (SaaS) and telecom service, making it subject to both sales taxes and telecom taxes and fees. This can result in a higher effective tax rate.

ServiceTitan’s Managed Technician product uniquely combines software as a service (SaaS) and telecom features. With Managed Technician subscriptions, you receive call forwarding, call recording, and call tracking, all subject to federal, state, and local telecom taxes and fees.

ServiceTitan, with guidance from Deloitte, regularly reviews the Managed Technician product to determine a fair split between software and telecom services for tax calculation purposes. Currently, the split is 87.95% SaaS and 12.05% telecom service.

If the Manage Technician license costs $1,000, then $879.50 (87.95% of $1,000) will be classified as SaaS and subject to sales tax. The remaining $120.50 (12.05% of $1,000) will be classified as a telecommunication service and will incur telecom taxes and fees, including sales tax on telecommunication services.

Note: These taxes depend on your location. SaaS may be exempt from sales tax, while telecommunication services are not. Depending on your jurisdiction's tax laws, you might encounter "Tax on Tax," which applies various taxes and government fees to the total invoice, including other taxes and regulatory surcharges.

Max Program is a bundled offering, which means it’s a sale of two or more distinct and identifiable products for a single, non-itemized price. How it is taxed depends on whether the bundle contains a mix of taxable and non-taxable items.

To accurately apply sales taxes and telecom fees, ServiceTitan allocates taxes based on the standalone selling price of each individual product in the bundle. Currently, Max Program allocation is 98.27% SaaS and 1.73% telecom service.