US Sales Tax and Economic Nexus for Spiritual Practitioners Selling Digital Products (2026 Guide)
Do astrologers owe sales tax on digital courses? 2026 guide to US economic nexus thresholds, which states tax digital products, and what to do at $100K.
Selling a pre-recorded astrology course to someone in New York is a taxable digital product sale. Selling the same content as a live, instructor-led session may not be. That distinction - between a digital good and a personal service - is the axis on which US sales tax turns for spiritual practitioners.
The rules vary by state, have been expanding steadily, and changed again in 2026. Here is what you actually need to know.
What Economic Nexus Means for Digital Product Sellers
Physical nexus is easy to understand: if you have an office, store, or employee in a state, you owe sales tax there. Economic nexus is the digital-era version. South Dakota v. Wayfair (2018) established that states can require out-of-state sellers to collect and remit sales tax once they cross a revenue or transaction threshold in that state - even with no physical presence there.
For most states, that threshold is $100,000 in sales or 200 transactions in the prior 12-month period - whichever you hit first.
Three important 2026 changes:
- Illinois removed the 200-transaction threshold effective January 1, 2026 - revenue only now
- Utah removed the 200-transaction threshold effective July 1, 2025
- The trend is revenue-only thresholds, not dual tests
Source: TaxCloud, 2026; Numeral, 2026; Sales Tax Institute, 2026
High-Threshold States
Two large states have a $500,000 threshold rather than $100,000:
- California: $500,000 in sales
- Texas: $500,000 in sales
For most solo spiritual practitioners, the California and Texas thresholds are unlikely to trigger - making those two states lower-urgency for nexus tracking than smaller states where $100,000 in total digital sales is more reachable.
Which States Tax Digital Products in 2026
30+ US states now tax at least some categories of digital products. The treatment of spiritual practitioner content - courses, downloads, readings - varies significantly.
State | Pre-recorded courses | Live online sessions | SaaS | Notable rule |
|---|---|---|---|---|
California | Generally NOT taxed | Generally NOT taxed | Partially taxed | Strong digital goods exemption |
Florida | Generally NOT taxed | Generally NOT taxed | Limited | Narrow digital product tax |
Illinois | Taxable | Varies | Taxable | Broad digital goods tax |
New York | Taxable | Varies | Taxable | "Digital products" broadly defined |
Texas | Generally NOT taxable if purely educational | NOT taxable (personal service) | 80% of sale price taxed | Complex rules on planning services |
Washington | NOT taxable (SB 6346, March 30, 2026) | NOT taxable | Taxable | Governor Ferguson repealed sales tax on live presentations in 2026 |
Source: Numeral, 2026; TaxCloud, 2026; HandsOffSalesTax; TaxCloud 2026 changes
Maine is adding digital audiovisual and digital audio services to its taxable category in 2026. Source: TaxCloud, 2026.
Live vs Pre-Recorded: The Critical Distinction
This distinction matters more than any other for spiritual practitioners.
Live, instructor-led sessions - a live astrology reading, a real-time tarot session, a live workshop with Q&A - are generally treated as personal services in most states. Many states do not tax personal services. Washington explicitly repealed the sales tax on live presentations in March 2026.
Pre-recorded courses - a self-paced astrology course, a downloadable PDF e-book, a digital oracle deck file - are treated as digital goods or digital products in many states. 30+ states tax at least some of these.
Memberships with live access are more complex. Taxability can depend on whether the primary deliverable is the live access (service) or the recorded content library (digital good). [VERIFY state-specific treatment for membership sites with mixed live and recorded content.]
Texas has a particularly specific rule: if a session involves spiritual guidance that crosses into financial or life planning advice at more than 5% of the total session content, the entire sale may become taxable. This is unlikely to affect most tarot or astrology readings, but it illustrates how detailed state rules can get.
Source: HandsOffSalesTax; Thinkific; RJM Sales Tax
How to Know if You Have Crossed the Threshold
Most practitioners do not track sales by state by default. Platforms like Gumroad, Payhip, and similar stores record customer location at checkout - but you need to pull that data by state to know whether you are approaching $100,000 in a specific state.
A practical checklist:
1. Export your sales data with customer location from whatever platform you sell on
2. Group by US state
3. Compare each state's total to its threshold ($100,000 for most; $500,000 for CA and TX)
4. For states where digital products are taxable (NY, IL, WA for recorded content, etc.), flag any state approaching threshold
5. Register when you cross it - not after the next filing period
For non-US practitioners selling to US customers: economic nexus thresholds still technically apply once your sales in a state cross the threshold - even with no US physical presence. In practice, a non-US astrologer with less than $100,000 in sales to any single US state owes no state sales tax in that state. Above the threshold in a specific state, registration is likely required. [VERIFY specific state-by-state applicability for non-US sellers with no US physical presence.]
Compliance Tools
Three tools handle sales tax compliance for digital product sellers:
- TaxJar (now Stripe Tax): automated nexus tracking and state filing. Starting around $19/month. Integrates with most ecommerce platforms.
- Avalara: enterprise-grade, pricing on request. More configuration for complex multi-state situations.
- Quaderno: designed specifically for digital product sellers. Integrates with Gumroad, Payhip, Kajabi, and similar platforms. Handles EU VAT, UK VAT, and US sales tax in one dashboard.
Quaderno is worth noting for spiritual practitioners who sell internationally - it handles both the US state nexus question and the EU/UK VAT obligation in a single tool. For the international VAT side, see the EU VAT OSS guide for non-EU spiritual businesses and the non-US tax guide for digital service practitioners.
Source: TaxJar; Avalara, 2026
What to Do When You Cross $100,000 in a State
The sequence once you cross an economic nexus threshold:
1. Register for a sales tax permit in that state (most states have an online registration process through their department of revenue)
2. Configure your checkout platform to collect the appropriate sales tax from buyers in that state
3. File and remit on the state's schedule (monthly, quarterly, or annually depending on volume)
4. Track ongoing sales to avoid missing thresholds in additional states
Do not wait until you file your federal income tax return to address state sales tax. State penalties for late registration can be significant.
For the 1099-K and income reporting side of US tax compliance, the US 1099 reporting guide for spiritual freelancers covers what payment platforms report to the IRS and what you need to declare.
Frequently Asked Questions
Do I owe sales tax if I sell only live tarot readings via Zoom?
Probably not, in most states. Live, instructor-led personal service sessions are generally exempt from sales tax in states that do not tax services. Washington explicitly repealed the tax on live presentations in March 2026. However, verify the treatment in your specific state before assuming an exemption applies - some states are expanding their definitions of taxable services.
What if I sell both live sessions and pre-recorded courses?
The two product types may be taxed differently in the same state. Track them separately in your sales records so you can calculate tax liability on just the digital product sales if needed.
Does economic nexus apply to international practitioners selling to US customers?
The principle applies - once sales to customers in a US state cross that state's threshold, a registration obligation likely exists. [VERIFY specific state-by-state applicability for non-US sellers.] In practice, most non-US spiritual practitioners do not reach $100,000 in sales within any single US state, making US sales tax registration a non-issue.
Is SaaS taxable in the US?
SaaS is taxable in approximately 25 US jurisdictions as of 2025-2026, per Anrok (2026). If you sell access to a membership platform, astrology software, or any subscription-based tool, SaaS taxability rules in your nexus states apply.
At what revenue level should I hire a tax professional for this?
Once you have nexus in 3 or more states, a CPA or sales tax specialist who works with digital product sellers is worth the cost. Below that, tools like TaxJar or Quaderno can handle the mechanics. The specialist is most valuable for determining taxability - whether your specific product type is taxable in a specific state - which automated tools may not always get right for unusual product categories like spiritual readings.