Steam does not publish a fixed list of states where it charges tax. Valve’s position is that it charges sales tax in states where applicable law requires it, and the amount appears at checkout. Whether you pay tax on a Steam purchase depends on three things: the state rule that applies, how that state classifies the item you are buying, and the billing address on your account.
What Valve says about Steam sales tax
Steam’s public tax FAQ states: “We charge sales tax in states as required by applicable law.” The same FAQ says that sales tax is calculated and then added on top of the Steam price, so the price you see before checkout is generally not the final amount. The FAQ does not name the states involved, and Valve does not publish a current state-by-state list on that page.
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Steam’s Subscriber Agreement adds that Valve may charge applicable use or sales tax in addition to published fees. Valve states that it remits the sales tax it collects to the relevant revenue authorities.
Why there is no simple list of states
Most older articles answer this question with a number, such as “Steam taxes purchases in a certain number of states.” That approach does not hold up. Tax treatment for digital products depends on how each state defines the product, and many states have changed their definitions over the past decade. A 2013 Iowa legislative research report, published by the Iowa Legislature, counted 33 of 45 sales tax states plus the District of Columbia as taxing downloaded computer software and games at that time. That figure is historical context only. It is not a current count and it does not describe Steam’s collection practices.
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Because the rules are set state by state, a list would also go stale quickly. The more useful question is which rule applies to the specific item in your cart.
How state rules classify games
State tax agencies do not treat all digital goods the same way. Four distinctions matter most:
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- Downloaded software versus online access. A game installed on your device may be taxed as prewritten computer software. A game you play by connecting to a service without downloading it may fall under a separate “digital product” category.
- Add-ons and subscriptions. Some states, such as Pennsylvania, list game add-ons and online-game subscriptions alongside downloaded games.
- Local additions. Where a state taxes a product, local rates may also apply. Tennessee’s guidance, for example, applies its state rate plus applicable local tax.
- Sourcing. The state decides which address controls the tax. Some use the buyer’s residential or primary business address, others use the billing address on file.
Five state examples
The table below summarizes official guidance from five states. These are examples of how states treat digital goods, not a map of where Steam currently collects tax. Where a source did not address a point, the cell says so.
| State | How it classifies games | Tax treatment described | Address used for sourcing |
|---|---|---|---|
| Tennessee | A game that cannot be downloaded and is accessed while remaining with the seller or a third party is a “video game digital product.” Downloaded games are computer software under a different tax law. | 7% state sales and use tax plus applicable local tax on charges for the right to access video game digital products. | Tennessee residential or primary business address is identified as relevant. |
| Michigan (2023 bulletin) | Video games downloaded or installed on devices may be prewritten computer software. | Digital goods outside the software definition are described as not taxable under the bulletin’s treatment. | Not stated in the bulletin. |
| Minnesota | Online video or computer gaming is a taxable digital product. | Prewritten software is taxable. | Digital product sales are sourced to the purchaser address the seller has on file. |
| Vermont (effective July 1, 2024) | Video games count as prewritten computer software. | Prewritten software sales are taxable regardless of delivery or access method. | Not stated in the guidance. |
| Pennsylvania | Downloaded games, game add-ons, online-game subscriptions, and canned software are digital products. | Paid transfers are generally taxable unless an exemption applies. | Customer’s billing address. |
Two of these states show how quickly a rule can change. Michigan’s treatment depends on whether a game is installed on a device, while Vermont removed the delivery and access distinction from its taxable software rule as of July 1, 2024.
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How to check whether your Steam purchase is taxed
- Open Steam and go to Account details from your account menu, then confirm the billing address and state on file.
- Add the item to your cart and open Checkout. Look for a tax line added on top of the item price. If there is no tax line, Steam did not collect tax on that purchase.
- If the tax line is present, note the product type. Compare it with the state rule for your state, such as whether it is downloaded software or remote access.
- If the amount looks wrong, check the state tax authority’s guidance for that product category before contacting Steam support.
Common reasons the tax differs between buyers
- Different state addresses. Two buyers buying the same game can see different totals if their billing or residential addresses are in different states.
- Different product types. A downloaded game and a game accessed remotely can be taxed under different rules in the same state.
- Local rates. Where local tax applies, it can add to the state amount.
- Exemptions. Some purchases may be exempt under a state rule. Steam can only apply exemptions the buyer’s account and location support.
What is and is not established
It is established that Steam collects sales tax where applicable law requires it, that the tax is added at checkout, and that several states tax digital games or software on different terms. It is not established from Valve’s public materials which states Steam currently collects in, and no current count of those states is available from official Steam sources. Any figure you see online for the number of Steam tax states should be treated as unverified unless it comes with a date and a source.
For a specific purchase, the checkout tax line and the billing address on your account are the most reliable indicators. For questions about how a particular state classifies a product, the state’s tax agency is the authority to consult.
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- Visa Virtual eGift Cards are designed for online use only. Gift Cards are subject to Terms and Conditions: a.co/5bw3qXJ
- When you access your Visa Virtual eGift Card for the first time, you’ll need to register your name, address, phone number, and email address via activationspot.com. These details should also be used as your billing address for online purchases, as many merchants require address verification for purchase authorization.
- This Visa Virtual eGift Card is non-reloadable. No cash or ATM access. Visa Virtual eGift Cards are emailed active.
- Funds do not expire but your Visa Virtual eGift Card has a ‘valid thru’ date (9 years from date of purchase). If funds remain after this date has passed, please call the Toll Free number found on your Visa Virtual eGift Card for a replacement card. A one-time purchase fee applies at the time of checkout.
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