FAQs on the New Agency Billing System

Tax Overview

Why is the billing process changing?
In June 2018, the Supreme Court ruled in the case of South Dakota v. Wayfair that states can charge sales tax on out-of-state purchases. This applies to online sales and SaaS products like SharpSpring, Hubspot, SugarCRM and Salesforce. In order to comply with the law. Sales tax must be collected from retail customers in the states in which they reside.
Which states currently require sales tax on SaaS products?
So far, 22 states are requiring sales tax collection with 12 more in process. We expect all states that charge sales tax on retail sales to begin collecting tax in the coming months.
Will you be remitting taxes on my behalf?
Yes. We’ll collect and pay sales taxes, so you don’t have to. Otherwise you’d have to collect and remit taxes in each state where you have at least one customer.
I have a tax-exempt client – how will this work for them?
No problem. The new billing console will include a checkbox option where you can flag a client as tax-exempt (e.g.: schools, churches, nonprofits).

Agency Experience

Why don’t you just tax my agency?
Every marketing automation/CRM company in our industry — even those that use agencies as resellers — consider the end-user their customer, not the agency. In the eyes of the state, SharpSpring is no different than companies like HubSpot, Marketo, Salesforce, SugarCRM, etc. This means that even though your agency is our partner, your clients are the end-users and beneficiaries of our software and need to be taxed.
Will my agency also be charged sales tax?
No, SharpSpring is covering this cost for our agency partners.
How does the new billing system protect my agency from overages?
Your clients will be charged directly for overage fees for emails and contacts and add-ons like Litmus, Shutterstock, etc. This helps eliminate surprise charges for you and frees up more of your agency’s cash flow.
Can I still decide how much to charge my clients?
Yes. As always, you decide how much to charge your clients for SharpSpring. We’ll bill each client on your behalf for the amount you choose, plus any applicable taxes.
How much time do I have to communicate this change to clients?
You’ll have 30 days to input each client’s credit card or ACH information starting on your November billing date. You’ll receive an in-app message within your SharpSpring account when the new billing page is available. Your clients will receive their first charge from us in December, and taxes will begin being applied in January.
When will my agency receive payment each month?
You’ll automatically receive a deposit 5 business days after your client's/s' billing date. By connecting your bank account, you’ll get fast, reliable payments from us.
Can I receive payment without setting up ACH?
Right now, all partner payments will be processed via ACH (or your country’s equivalent, such as IBAN, BACS or SEPA). This ensures fast, reliable payments for everyone.
What if I currently roll the SharpSpring license fee into my client’s retainer?
To accommodate for your management fees, there will be an additional line item in the new billing console that allows you to charge clients for your full retainer right out of SharpSpring. This “Agency Services” line will not be taxed. This means your clients can still get one bill from you each month – nothing needs to change for them. Alternatively, you can lower your retainer by the license fee you charge your client in the new billing system. In this case, the total amount clients pay each month will remain the same.
What if I don't charge my clients for SharpSpring?
Due to these new tax laws, clients cannot be charged less than the base license fee. Sales tax needs to be applied for at least the minimum value of the product.
Can I bill my clients annually instead of monthly?
Yes, you’ll also be able to bill your clients annually upfront within the new billing console.
How does the agency margin work on the new digital advertising and remarketing platform?
Easy! Within the new billing console, you’ll be able to indicate a percentage of each client’s total ad spend that you want to keep as your margin. This will be billed directly to the clients (so your card isn’t flooded with multiple ad budgets), and you’ll receive your agency margin as part of your monthly ACH payment from SharpSpring.
Do my client’s payments go into SharpSpring’s bank account or serve to boost SharpSpring revenues?
No, we are acting as a billing service for your agency. We are using Stripe to collect and remit your client’s payments to you (less your SharpSpring fees). Your funds remain in Stripe until they are remitted to you, which happens within 5 business days. At no time do we deposit your funds into our bank account, and we do not recognize your funds as revenue.
Will my agency still be billed for client overages and add-ons? (Emails, contacts, Litmus, Shutterstock, etc.)
No, in the new billing system, your clients will incur all overage fees directly, excluding Direct Support – eliminating surprise charges for you, and freeing up more of your agency’s cash flow.
How do I submit my reseller certificate to SharpSpring?
The process to obtain a reseller certificate differs from state to state. To understand the rules of your state, contact your local department of revenue. All documentation can be sent to billing@sharpspring.com.

Please note: Sales tax laws are subject to change. For specific sales tax advice, consult your legal council, CPA, or other sales tax expert.

Client Experience

Will SharpSpring be talking directly with my clients?
No. This billing change is purely based around being tax compliant – you are still in full control of your client relationship. We’ll never talk to your clients without your knowledge.
Will my clients see what I pay for SharpSpring?
No, SharpSpring agency pricing will always be completely confidential.
When will my clients get charged?
Your clients will be charged on your agency’s current billing date. All of your clients will be billed on the same date, and your agency will receive payment from SharpSpring 5 business days later.
What will my clients see on their monthly statements?
The SharpSpring charge will appear on your client’s monthly bank statement as “SHSP*YourAgencyName” using the agency name you’ve entered into your Company Profile.
What happens if my client’s payment fails?
We’re here to help. If a client’s payment fails, we’ll retry the charge two more times over the next 10 days with an in-app message alerting both you and your client that new billing information is required. After this window, your agency will be charged for the base license fee plus any incurred overages from the previous month. You will be responsible for collecting any additional fees from your client. Once the client’s billing information has been updated, the next month will be billed to the client as usual.
My clients have already paid me for a year – how can I avoid double charging them now?
No problem! We support annual billing. You’ll still have to provide the client’s billing information, but we’ll credit them for the months remaining on your existing agreement. Just let us know what the renewal date is for this particular client, and we’ll allow your agency to continue being billed until they’re up for renewal.
Will my clients be billed in arrears or in advance?
Your clients will be billed in advance, and your agency will continue to be billed in arrears. Each month, clients will pay for the month ahead, as well as for any overages they incurred during the previous month. Your monthly deposit will include your proceeds for the current month minus what you owe for the prior month’s base license fees.
Will there be any additional fees associated with the new billing process?
Yes, there will be a 3% fee for clients paying by credit card or a $0.50 fee for those who chose to link their bank account through ACH or the equivalent.

International Partners

My clients are not in the U.S. – will this still affect my billing process?
Yes. All new clients will use the new billing system. While this solution was built for U.S. tax compliance, we truly see benefits for all partners – like improved cash flow, agency margin protection, and additional revenue through the new ad platform.

The new billing platform is currently available in the following regions (subject to change):
  • Australia
  • Belgium
  • Canada
  • Switzerland
  • Germany
  • Denmark
  • Estonia
  • Spain
  • Finland
  • France
  • United Kingdom of Great Britain and Northern Ireland
  • Hong Kong
  • Ireland
  • Italy
  • Netherlands
  • Norway
  • New Zealand
  • Portugal
  • Sweden
  • Singapore
  • Slovenia
  • United States of America
How is VAT tax handled?
The new billing system includes an invoice designed to be VAT compliant. You can enter the percentage of VAT tax you’d like to apply to your client’s SharpSpring bill. We will collect VAT at the rate you enter and remit it back to you in your monthly SharpSpring deposit. Note: your agency is still ultimately responsible for meeting VAT compliance standards.
Can I bill my clients in my local currency?
Yes. Simply select the currency you’re using (USD, GBP, EUR, AUD, NZD or CAD) and your agency and all client instances will be billed using this same currency. There will be no conversion fees, and all transactions will be local in all countries. E.g.: any funds remitted back to a partner will come from a local Stripe account in that country.

Disclaimer: This document is not legal advice. It is only meant to provide general information on selected aspects of new state tax law. While this document addresses some legal aspects of the law, it is not intended to provide legal advice. SharpSpring recommends that you consult your attorney on how best to comply with state and federal tax law.