Sales Tax Attorney Berwyn
Given the variations in rates and rules that apply to product taxability, it’s important to know which jurisdictions require sales tax collection. Yet knowing where your company has nexus (the connection that triggers a sales tax collection obligation) is more difficult than it seems. Nexus can be triggered even for sellers without a significant physical presence in a state, such as online sellers. Other nexus-creating activities range from traveling sales people to attendance at trade shows to the use of a drop shipper. Deciphering nexus is only the first step in the complicated process of identifying the product taxability challenges ahead.
Many service-based businesses that provide customer support, installation, or warranty services in conjunction with the sale of a physical good could keep an army of accountants busy for a year trying to determine exactly what is taxable. If you run service contracts on goods sold, or if you service tangible goods as part of your sales to customers, you may be liable to collect sales tax.
For instance, in Hawaii, New Mexico and South Dakota, a sales tax is imposed on all services provided. In other states, lawmakers have taken a piecemeal approach and tax some types of services while leaving others exempt.
Determine whether the state in which you have nexus, defines certain services as taxable. In Texas, for example, janitorial services are taxable. Generally, tax is due on the entire amount charged for a taxable service, including items such as labor, materials and mileage charges, even if separately stated.
Sales Tax Attorney Berwyn