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A Tax Question

Posted on 2013-06-10
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Last Modified: 2013-06-10
I offer strictly services, computer repair, websites and the like.

Do I charge taxes?

Additionally I operate across state lines (Based in Arizona)
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Question by:Jonathong
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LVL 24

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by:aadih
aadih earned 400 total points
ID: 39235593
To be strictly legal:  Yes.

For parts, definitely; for labor, perhaps not.  But you may like to give an accountant (or a state tax person) a call.
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by:Dave Baldwin
Dave Baldwin earned 400 total points
ID: 39235772
You definitely need a qualified tax person to advise you.  There are all sorts of details to the California tax codes.  If you supply parts to customers, somebody must pay the sales tax.  I don't know if there are any service taxes but I haven't checked recently.
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Matthew Kelly earned 1200 total points
ID: 39236417
For me, as an Ohio resident, sales tax is required to be collected for web hosting for a person in Ohio. However, the charge for creating a website is not: See the "What services are subject to the sales tax?" section here: http://www.tax.ohio.gov/faq.aspx

Is the charge for creating an Internet Web site taxable?
The charge for creating a Web site on an ISP’s server is a charge for personal service and it is not subject to sales or use tax.

Your state will likely have its own/different sales tax laws as will any of the states you operate in. Some counties even have additional sales tax you would need to collect/remit.

You will need to talk to a tax professional/talk to your State tax agency. I have called and spoken with the Ohio Department of Taxation as well as had an accountant look at a sample invoice where I added every item/service I charge for (i.e. web hosting, web application development, email hosting, etc) and had them tell me which ones sales tax should be collected for and which ones shouldn't.

For Ohio, sales tax is remitted online either twice a year or once a month depending on how often. Also, it is a felony (or something really bad) to collect sales tax and then not remit it to the State so be sure to do it!
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Author Closing Comment

by:Jonathong
ID: 39236534
Thanks guys!
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