1. Money
Jean   Murray

Do I Have to Charge Sales Tax on My Services?

By August 6, 2008

Follow me on:

I spent some time last weekend talking to someone who wants to go into business to set up a web site that sells online listings. During our discussion, we came to the question of whether his service is subject to sales tax. I said I would do some checking for him.

Since sales taxes are set by the states, it is difficult to make any general statements about this question. Here is what I found for Iowa: The Iowa Department of Revenue lists sales taxes on all kinds of products. For services, the site states:

Unlike tangible personal property, which is subject to sales/use tax unless specifically exempted by Iowa law, services are subject to sales/use tax only when specified by Iowa law. Iowa sales tax is due when the taxable service is rendered, furnished or performed.

So what I understand is that sales of tangible items are subject to sales tax, unless the item is called out as being non-taxable, while sales of services are only taxable if the service is on the list. Makes sense. I read through the list and didn't find his particular type of service (Internet listings). For the definitive information, the site suggests you call and ask. Probably, this is a smart idea. Among professional services, investment counseling, dating services, and limousine services are listed as taxable. It doesn't look like other professional fees are taxable.

I checked a couple more states, just to see...

  • Florida has a nice Business Owner's Guide, but it didn't specify what services are taxable; it just said "certain services" are subject to sales tax. Not very helpful.
  • It took me a while to find the list of taxable services for Ohio, but I was able to locate it in the FAQ's. This might be a possibility for you, if you're having trouble locating the list.

Only 46 more states to go....

Comments
August 7, 2008 at 6:16 am
(1) www.constructii-locuinte.ro says:

Constructii case blocuri http://www.constructii-locuinte.ro

Firma de constructii executa case la rosu, case la cheie,blocuri,vile,case din lemn,tencuieli,sape,termosistem,acoperisuri,rigips,pavaje,zugraveli,faiantari,gresie,parchet laminat,instalatii electrice si sanitare.TEL:0744981385 http://www.constructii-locuinte.ro

July 30, 2009 at 10:44 pm
(2) Kawika says:

How about Utah? What services are taxable in Utah?

August 16, 2013 at 5:55 am
(3) peter popoff ministries scandal says:

I ωill immediately snatch your rsѕ as I can’t find your e-mail subscription link or newsletter service. Do you have any? Kindly allow me realize in order that I could subscribe. Thanks.

August 19, 2013 at 2:04 pm
(4) cold calling is a waste of time says:

When someone writes an article he/she retains the plan of a user in his/her brain that how a user can understand it.
So that’s why this paragraph is perfect. Thanks!

August 24, 2013 at 1:01 am
(5) scriptstelemarketing.edublogs.org says:

When someone writes an piece of writing he/she retains the
thought of a user in his/her brain that how a user can know it.

Therefore that’s why this article is amazing. Thanks!

Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>

©2014 About.com. All rights reserved.