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Digital Subscriptions of Physical Goods
Digital Subscriptions of Physical Goods

How to categorize your product.

Tom Adler avatar
Written by Tom Adler
Updated over 2 months ago

Question: if someone sells a physical good through a digital subscription on their website what would you categorize the product as?

Answer: The essential aspect here is the tangible property received by the customer (example: razor blades). While the transaction occurs digitally and is part of a subscription service, the taxable item is the monthly physical package of razor blades. States typically tax physical goods, and in this case, the subscription model doesn't change the taxability of the physical product. So this will be Physical/General Physical.
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