Are Digital Marketing Services Taxable in Texas?

If you run a digital marketing agency or hire one to grow your brand, you may be asking:
“Are digital marketing services taxable in Texas?”

The answer? It depends.

At Attah Digital, we work with clients across the US—and we know how confusing local tax laws can be. This blog breaks down what Texas considers taxable vs. non-taxable when it comes to marketing services like SEO, web design, social media, and more.

Let’s dive in.

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🔍 The Short Answer:

Most data-driven digital marketing services are taxable in Texas.
Things like SEO, website development, PPC reporting, and analytics fall under “data processing services,” which are subject to state sales tax.

But—strategy, consulting, and creative planning?
Those are often non-taxable.

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✅ What’s Taxable in Texas?

Texas classifies some digital services as “data processing,” which includes the use of a computer to:

• Compile
• Analyse
• Store
• Retrieve
• Process data

Examples of taxable digital marketing services:

• Website development (including coding and CMS setup)
• SEO analytics and keyword reporting
• PPC campaign setup with dashboards and metrics
• Social media automation tools and analytics
• Email list segmentation and data processing

📌 Note: While these services are taxable, 20% of the total charge is exempt under Texas rules—so only 80% of the fee is taxed.

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🚫 What’s NOT Taxable?

Some digital services fall outside the scope of sales tax—especially those focused on ideas, strategy, or communication.

Non-taxable services typically include:

• Brand strategy and consulting
• Content planning and creative direction
• Copywriting and campaign ideation
• Marketing audits and workshops
• UX strategy and customer journey mapping

🎨 Even some parts of graphic design can be exempt—unless the final deliverable includes “finished art” like logos, brochures, or other tangible assets.

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⚠️ Beware of Bundled Services

If you’re combining taxable and non-taxable services in one package or invoice, Texas law presumes the entire package is taxable—unless you clearly itemise or allocate costs.

🧾 For example:

❌ “Digital Marketing Package – $5,000” = Fully taxable
✅ “Strategy: $2,000 (Non-Taxable), SEO Reporting: $3,000 (Taxable)” = Partial tax applies

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💡 What This Means for You

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👉 If You're a Marketing Agency:

• You must collect and remit sales tax on qualifying services.
• Register for a Texas sales tax permit if serving Texas-based clients.
• Clearly define and document your service breakdown.

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👉 If You're a Client Hiring an Agency:

• Be aware that sales tax may apply to certain services you receive.
• Ask your agency to itemise the invoice.
• If you’re tax-exempt (nonprofit, government, etc.), provide the correct documentation.

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🔁 Common Misconceptions

StatementTrue/False“Digital services are tax-free in Texas.”❌ False“Consulting work is always exempt.”✅ True“Designing a website layout is taxable.”✅ True“Sending a monthly newsletter is taxable.”✅ If automated or analytics are included“Posting on social media is not taxed.”❌ It depends—reporting or automation = taxable

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📌 Final Thoughts

Navigating sales tax on digital services isn’t always straightforward. But understanding where the lines are drawn can help you stay compliant—and avoid surprises on your invoice.

At Attah Digital, we’re not just design and marketing experts—we keep our business practices airtight, too. That includes offering full transparency around pricing, tax compliance, and service deliverables.

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🧠 TL;DR Summary

• Yes, many digital marketing services are taxable in Texas—especially anything involving data processing.
• Strategic and creative planning services are generally non-taxable.
• Always itemise mixed services to avoid full taxation.
• When in doubt, consult a Texas tax professional or contact the Comptroller's Office.

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