Do you know if an online business that offers a service, such as an online web design company that develops and designs webpages, pay sales taxes for the revenue generated when a person purchases service?
If the company is located in Arizona and the buyer is located in Maryland, what sales tax rate is applied to the sale -- is it the one from Arizona, which is where the business is located and performs the service, or is in the one from the state of Maryland --which is where the buyer is located?
How do I figure out which sales tax rate to apply to a service purchase by a customer?
What if the buyer comes from a location outside of the United States of America? Are their import or export taxes applied to the product resulting from the service?
What if the service involves going to a library and pulling records for the customer. The customer just pays for the time to find the records. The records are not the property of the service provider and are not considered items that are being sold. Does the customer still pay a tax for the service?
You need to contact you own state tax controller's office. I have an online store and I only have to collect the tax from someone who buys from me in my own state. I keep records of this, and I send in the paperwork requirement to the state tax controllers office every 3 months. Since my wholesaler is out of state he collects his state taxes from me when someone buys something from me in his state. Then he pays the taxes on his end. Just make sure you get your license and all the information you need. I know, its a little confusing at first, but you will catch on.
There are a number of laws being pushed in different states that are trying to push collecting sales tax from internet companies. Even if they sell something to someone where they do not have a physical location. So it is best to stay on top of that. We are al;weays checking with our accountant for the different changes that occur.
BizResearcher | Window Shopper |
6/29/2010 - 8:40 am
A quick call to your state department of revenue should answer your question. Some states collect sales tax on services; others don't but they may begin doing so if the recession continues. You pay sales tax in the state where your business is registered and where you perform the work.
If your business has a physical 'presence' in a state, such as a store, office or warehouse, you must collect applicable state and local sales tax from your customers. If you do not have a presence in a particular state, you are not required to collect sales taxes there.
If you are uncertain, whether or not your business qualifies as a physical presence, contact your state's revenue agency.
Determining which sales tax to charge can be a challenge. Many online retailers use online shopping cart services to handle their sales transactions. Several of these services are programmed to calculate sales tax rates for you.
verdecove | Creator | 8/13/2010 - 11:11 am
NicoleD | Former Moderator | 8/10/2010 - 7:01 am
OrganicGirl | Window Shopper | 7/31/2010 - 1:57 pm
BizResearcher | Window Shopper | 6/29/2010 - 8:40 am
NicoleD | Former Moderator | 6/28/2010 - 9:25 am
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