Due to the advancement in the science of processing and characterization of nanostructured materials, along with the industrial-scale production and decreasing cost of carbon nanotubes, their use in technologies as sensors and sensing skins is gaining popularity. With increasing Technology Readiness Levels (TRL) and field trials implemented by researchers, it is critical to characterize the sensing response of the carbon nanotube sensing skins under complex loading scenarios in order to simulate the real-life conditions. Typically, researchers describe the sensitivity (gage factor, GF) and sensing response of a carbon nanotube sensing skin based on the electrical resistance change and the longitudinal strain (ε1), not taking into consideration the effect of transverse strain (ε2) due to the Poisson's ratio of the material. Since the sensitivity of the sensor is dependent on the transverse strain, the sensitivity is affected by the properties of the substrate material. As a result, the calibration of the sensing skin is challenging. The principal objective of our research is to characterize the effect of transverse strain and develop a methodology to quantify the influence of transverse strain on the sensing response. The carbon nanotube-based sensing skins are manufactured using a scalable manufacturing technique and the effect of different loading scenarios on the sensing response are investigated. Carbon nanotubes are deposited on non-woven aramid fabrics with randomly oriented fibers and the resulting carbon nanotube-based sensing skin is bonded to steel and composite substrates which are subjected to flexural and axial loads to characterize the sensing response. A cruciform shaped specimen with a carbon nanotube sensor is tested using a biaxial testing machine and change in resistance under varying transverse loads is characterized. Key results indicate that the sensitivity of the carbon nanotube sensing skin is significantly affected by the transverse strain due to the Poisson effect which should be taken into consideration when calculating the gage factor or calibrating the sensors.