Introduction
Sales-tax holidays are well-known in Texas—back-to-school weekends and energy-efficient product promos—but what about SaaS products bundled with hardware or services? Can software startups benefit in 2025?
This blog explores whether SaaS bundles qualify for sales-tax holiday exemptions, the interpretation of bundled transactions, and what Texas sellers must do to comply.
Texas Code References
- Texas Tax Code §151.318 – Exemptions on manufacturing equipment
- Texas Tax Code §151.0101(a) – Taxable services
- Texas Administrative Code §3.308 – Bundled transactions
- Texas Comptroller Rule 3.365 – Sales tax holiday rules
What Is a Bundled Transaction?
Texas defines a bundled transaction as:
A sale of two or more distinct and identifiable products (one taxable and one exempt) sold for a single non-itemized price.
When SaaS is bundled with a:
- Tablet or device during a back-to-school holiday
- Training or consulting service
- Downloadable media or USB stick
…the entire bundle could be taxable or exempt depending on dominant intent.
Example: EdTech SaaS with Device Package
Example: LearnSpark LLC sells:
- A subscription to its learning platform (SaaS)
- Bundled with a student tablet
- Priced at $399 flat
During the Texas August sales-tax holiday, tablets under $1,000 are exempt. But the SaaS component is not exempt—unless they clearly split pricing or qualify the entire bundle as educational hardware.
If LearnSpark breaks the pricing:
- $299 for tablet (exempt)
- $100 for SaaS (taxable)
They must collect tax only on the $100.
Step-by-Step: Handling SaaS Bundles in Tax-Free Periods (2025)
- Review Texas Holiday Item List
Check official list from the Texas Comptroller before the promo. - Analyze Your Bundle Structure
If you offer devices + software + services, split pricing clearly. - Use Invoices with Breakouts
Show line items: device, software, and support/service. - Apply Tax Rules Based on Primary Use
If the bundle is primarily taxable (like SaaS), exemption likely doesn’t apply. - Train Checkout and POS Teams
Ensure proper coding during sales-tax holiday weekends.
Conclusion
SaaS vendors can benefit from Texas sales-tax holidays if they plan the pricing and presentation right.
By itemizing exempt and taxable parts, startups avoid overcharging or under-collecting tax—and stay audit-proof.
Call to Action
Selling SaaS bundles or EdTech products in Texas?
Book a strategy session with Anshul Goyal, CPA, EA, FCA to:
- Assess if your products qualify for sales-tax holidays
- Split invoices and pricing to preserve exemption
- Set up audit-proof sales processes
Sales-tax holidays offer savings—only if you file right.
https://calendly.com/anshulcpa/
About Our CPA
Anshul Goyal, CPA, EA, FCA
Anshul brings 15+ years of U.S. and international tax experience. He specializes in helping online sellers, foreign founders, and U.S. residents with IRS and multi-state compliance. Known for his deep knowledge in Shopify and Amazon seller tax strategy, Anshul has helped hundreds of entrepreneurs minimize taxes and scale legally.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified tax professional regarding your individual tax situation.
Top 5 High-Searched FAQs (2025)
1. Is SaaS exempt during Texas sales-tax holidays?
No. Only specific physical items qualify, unless software is itemized separately.
2. What if I sell hardware + software in a single price?
If not itemized, the entire sale is likely taxable.
3. Are educational devices tax-free in August?
Yes, if under $1,000 and listed by the Comptroller.
4. Can I split pricing to preserve exemptions?
Yes—itemized invoices allow correct taxation.
5. What’s the best practice for SaaS sellers in TX?
Break out pricing, use POS codes, and verify exemption lists.