Posted by VT_Syrup on 8/1/12 5:00pm
Msg #429008

Sales tax in states that don't tax services

Suppose you are doing a signing for a title company that is located in your state. The parcel company will deliver the package to a place within your state. Your state charges sales tax on tangible, touchable goods, but not on services.

Does anyone charge sales tax in this situation? I'd be inclined not to, in that most of the value of what we do is provide services; the value of an unsigned package is minimal. My state allows me to not charge sales tax if a service I provide includes "de minimis" tangible goods, which means the value of the tangible goods is no more than 10% of the price charged for the goods and services combined.

Has anyone else thought about this?

Reply by Deborah Breedlove on 8/1/12 6:05pm
Msg #429016

No I do not charge sales tax. I am not selling loan documents. I am only selling a service. The fact that I print their documents is part of the service, but I am not selling the documents themselves.

I am also an accountant and prepare tax returns. Even though this service includes providing paper copies of financial statements and tax returns to clients, it is still a service that is not subject to sales tax.

Reply by Barb25 on 8/1/12 7:17pm
Msg #429019

Never gave it a thought

Reply by MW/VA on 8/1/12 7:20pm
Msg #429020

No sales tax on services in VA, only goods. I don't collect or submit sales tax to the state.

Reply by Buddy Young on 8/1/12 8:05pm
Msg #429029

don"t give the state any ideas to collect more revenue

Reply by EileenHI on 8/1/12 8:31pm
Msg #429032

Here in hawaii we have what is called a general excise tax that applies to EVERYTHING including services (I was shocked when I moved here and had to pay tax on a doctor visit). I do not charge the GE tax when I do gn work, I just pay it twice a year. It is 4.5% and I have to pay it on all my gross income for the time period.

Reply by MikeC/TX on 8/2/12 5:18pm
Msg #429142

"Your state charges sales tax on tangible, touchable goods, but not on services."

You answered your own question. The "tangible, touchable goods" (i.e., the documents) were provided by someone else; you're coming in at the tail end of the transaction to simply facilitate the signing, thereby providing a service. Even if sales tax was due in this case (under some bizarre interpretation of the law), collecting it would not be your responsibility.

"the value of an unsigned package is minimal."

So is the value of the signed package, in terms of "tangible, touchable goods". You're over-thinking this...