Tax Overview
Which states currently require sales tax on SaaS products?
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. 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?
Your clients are yours, so you will be responsible for charging any taxes to your customers required by each state where you do business. If you want more information on our stance, check out this note from Rick.
Agency Experience
Will my agency be charged sales tax for SharpSpring?
Yes, SharpSpring will charge sales tax on all applicable fees on your SharpSpring invoice. However, if you submit a reseller certificate you may be exempt from sales tax on line items that are resold to your clients. Additionally, if you are a non-profit and have a sales tax exemption certificate you may be exempt from sales tax completely.
How much will you charge my business for sales tax?
Sales tax is set by State and Local Governments, your exact tax rate will depend on your jurisdiction’s specific tax rates. We are partnering with Avalara (NYSE: AVLR) to provide real-time calculations of the sales tax that we are required to charge our partners.
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.
When will my agency receive payment each month?
By connecting your bank account, you’ll get fast, reliable payments from us. SharpSpring processes agency payouts on Tuesdays and Thursdays every week. If there is an available balance in your agency's Stripe account we'll begin the process of transferring that to your bank account.
Can I receive payment without setting up my bank account?
All partner payouts will be processed via a bank transfer. We have partnered with Stripe to ensure fast, reliable payments for everyone. Resellers need to connect their bank account with Stripe in order to be charged and paid out.
What if I currently roll the SharpSpring license fee into my client’s retainer?
To accommodate your management fees, there’s an additional line item in the Client Configuration Page that allows you to charge clients for your full retainer right out of SharpSpring. This “Agency Services” line is not taxed, so 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 platform. In this case, the total amount clients pay each month will remain the same.
What if I don't charge my clients for SharpSpring?
To ensure your clients cover your agency's base cost, clients cannot be charged less than the base license fee for SharpSpring.
Can I bill my clients annually instead of monthly?
Yes, you can bill your clients annually upfront within the new billing platform.
How does the agency margin work on the new digital advertising and remarketing platform?
Easy! From the Client Configuration Page, you are 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 payout 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, using Stripe to collect and remit your client’s payments to you. Your funds remain in Stripe until they are remitted to you, which happens once funds are made available and processed every Tuesday and Thursday. At no time do we deposit your client funds into our bank account. We do not recognize your client funds as revenue.
Will my agency still be billed for client overages and add-ons? (Emails, contacts, Litmus, Shutterstock, etc.)
Yes, your agency will be charged for your base client licenses, usage, and any add-ons associated with SharpSpring — and so will your clients. You’ll receive 100% of what we collect from your clients as a payout directly to your agency.
Client Experience
Will SharpSpring be talking directly with my clients?
No. 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 the following Tuesday or Thursday, as long as the funds are available to pay out.
What will my clients see on their monthly statements?
The SharpSpring charge will appear on your client’s monthly bank statement as “Agency Name *SHARPS*” using the agency name you’ve entered into your Company Profile.
What happens if my client’s payment fails?
Once your client’s billing information has been updated, the next month will be billed to the client as usual.
If a client’s payment fails, we’ll continue to retry the charge two times over the next 10 days with an in-app message alerting both you and your client that new billing information is required.
After the 10-day window, your agency will be responsible for collecting any additional fees from your client. Once your client’s billing information has been updated, the next month will be billed to the client as usual. SharpSpring will not deactivate your client’s account for non-payment.
What if my client will only take an invoice?
There is an invoice option available for select partners when needed. Agency partners cannot move a client to invoice charges on their own. Partners must reach out to Billing Support and eligibility for this option it is considered on a case-by-case basis. Invoicing will only be available for current clients.
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.
International Partners
My clients are not in the U.S. – will this still affect my billing process?
Yes, all new clients moving forward will use the new billing platform.
There is an invoice option available for select partners when needed. However, these requests will need to be submitted to the Support team and are considered on a case-by-case basis. Invoicing will only be available for current clients. You will be responsible for collecting the appropriate sales taxes from these clients.
We recommend moving your current clients into the new system. All partners will benefit from the agency margin protection, and additional revenue through the new ad platform.
There is an invoice option available for select partners when needed. However, these requests will need to be submitted to the Support team and are considered on a case-by-case basis. Invoicing will only be available for current clients. You will be responsible for collecting the appropriate sales taxes from these clients.
We recommend moving your current clients into the new system. All partners will benefit from the agency margin protection, and additional revenue through the new ad platform.
How is Value-Added Tax (VAT) 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 payout. Note: your agency is still ultimately responsible for meeting VAT compliance standards.
Can I bill my clients in my local currency?
Yes. All charges will be processed through our local payment processor and will be charged in the currency denoted on your contract (USD, EUR, GBP, AUD or CAD). If you have questions about how client billing applies to your unique situation, contact support.
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.
