Most AI founders are building in a tax gray zone they don’t even realize exists. In this episode, Paid’s Manny Medina and Arnon Shimoni sit down with Commenda’s Spencer Schneier and Sam Suechting to unpack their landmark study on AI agent taxability, which is the first of its kind to test how U.S. states classify AI agents under sales and use tax law.
The takeaway: how you structure your AI business can be the difference between being taxable in 22 states or just 4.
“Productivity has shifted from labor to capital. Tax systems haven’t.”
Paid’s research with Commenda reveals a $2.7 billion hole forming in state and federal revenues as AI agents replace taxable workers but escape existing tax categories. Two companies offering nearly identical automation services can face totally different tax bills, depending on whether they’re classified as software or managed services. The group explores what that means for founders, policymakers, and the future of work.
They trace the historical parallels: it took 25 years for e-commerce to become taxable and warn that governments will face the same lag with AI.
“It’s not a loophole,” Arnon Shimoni says. “It’s a blind spot.”
The conversation moves fast: how outcome-based pricing supports tax exemption, why Private Letter Rulings (PLRs) are the new shield for AI companies, and what founders can do right now to structure their revenue legally and defensibly.
This is the episode for anyone building AI products that do work. Because the difference between “software” and “service” isn’t just semantics but it’s your tax bill, your margins, and the next $2.7 billion question.
Read the full report: https://paid.ai/blog/ai-agents/the-2-7-billion-agent-tax-crisis-first-ever-study
Companies Mentioned
- Paid
- Commenda Technologies
- Amazon
- Wayfair
- Nvidia
- OpenAI
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