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12 Replies Last post: Aug 9, 2008 12:48 AM by swimshopchina

Sales Tax

May 14, 2008 2:51 PM

Click to view LUCKIEST's profile SCORE LUCKIEST 7,935 posts since
Aug 6, 2007

In regards to services,
if I perform a service in New York for a client that resides in California. Does the sales tax apply to the California client?


In regards to selling a product
online, we are located in New York but clients are outside of New York,
does
the sales tax apply


Thanks for clearing up these
points.

Tags: home_business, internet, new_business, online, website, design, need, marketing, ecommerce Report as inappropriate
Click to view MetroGal's profile Mogul MetroGal 101 posts since
Oct 20, 2007
1. Re: Sales Tax May 14, 2008 9:30 PM
in response to: LUCKIEST

I would like the answer to this question as well. Someone please answer. Thank you.
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Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
2. Re: Sales Tax May 15, 2008 1:34 AM
in response to: LUCKIEST

As for the first question, most services are not subject to NY state sales tax, but some services are (for example, the maintenance or repair of property). See NY State Dept. of Taxation and Finance Publication 750 for a complete list of services that are subject to sales tax.

If the service is subject to sales tax and is performed in New York, then sales tax would be collected even if the client resides in CA. If the service is (a) not subject to sales tax, or (b) subject to sales tax, but performed in CA -- then no sales tax would be collected.

As for the second question, in general, no -- NY state sales tax is not collected on products sold and shipped to addresses outside NY state. However, NY has agreements with CT and NJ that allow (encourage) New York businesses to collect CT and NJ sales tax on products shipped to those states (in part, because the tax would technically be due anyway if the product was brought back to NY for use). Again, see Pub.750 for more details.

Hope that helps.
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Click to view Santa Fe CPA's profile Mogul Santa Fe CPA 67 posts since
Oct 10, 2007
3. Re: Sales Tax May 15, 2008 1:13 PM
in response to: LUCKIEST

Several years ago, the US Supreme Court ruled in the Quill decision that sales derived from transactions in another jurisdiction are not subject to the sales tax of that jurisdiction and may not be collected by the non-resident seller. Sales taxes are actually levied upon the consumer and not the seller or producer. The buyer becomes liable for the "Use Tax."


For the second part of your question, in the absence of an interstate agreement sales taxes would, also not be collected.

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Click to view MRFINANCE's profile Mogul MRFINANCE 104 posts since
May 11, 2008
4. Re: Sales Tax May 15, 2008 1:59 PM
in response to: Santa Fe CPA
Right on the MONEY!

If you have a small office located in that state you must also collect sales tax.


Joe

Richton Funding

WWW.businessloansfast.net

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