Bundled Transactions Present Sales Tax Challenges for Payment Processors

This article originally appeared in the August 2025 issue of Tax Notes.

Payment processing companies generally facilitate quick, secure transfers of funds from customer accounts to merchants. They come in several forms and can incorporate features that are classified as software or an otherwise taxable service. It is essential for companies to understand that the user-based functionality of their offerings and invoicing procedures directly affect sales tax treatment in some states.

BDO’s Thomas Leonardo provides full details in this article in Tax Notes.