Re: Freelance question: Sales taxes (Long)

[Peter <pnewman1 -at- home -dot- com>]

THE FOLLOWING IS NOT LEGAL ADVICE. YOU SHOULD CONSULT A TAX PROFESSIONAL
IN YOUR LOCAL AREA FOR SPECIFIC DETAILS

Sean, 
Every state has a different rule. However, in most states professional
services such as custom authoring and custom software development are
not subject to sales and use taxes. Ct. simply does not equate auto
repair and computer hardware repair with professional services such as
software repair. The hardware installation is taxable, while custom
software installation is not. If you write a book to be sold to the
general public, the selling price is subject to those taxes, unless you
are selling the book to a reseller. If you are custom designing a web
page, the rule may be fuzzy. I have not checked it in NY. Most state
tax, or revenue departments have a procedure for obtaining an advisory
written opinion.
Here are some of the most important general rules:
	The opinion will apply only to the person seeking the opinion.
	The opinion will only apply to the specific question and will only
apply to the set of facts presented. Thus, if you ask for an opinion
based upon one set of facts, it may not apply to another set of facts.
	The department will not determine facts, you must supply those. 
	It should give you such answers as whether that department considers a
web page to be art, (taxable,) or programming, (non-taxable.) That
determine will largely depend upon the intended function.
Perhaps the law in your state may require you to allocate your invoice
between the taxable and nontaxable portion. Complex, yes. Impossible,
possibly. Must be dealt with, (definitely.) 
The above information is copyrighted and may not be reproduced in any
form without the express written permission of the author.

-- 
Peter

Arguing with an engineer is like mud wrestling with a pig.
You soon realize they both enjoy it.

"Brierley, Sean" wrote:
> 
> Hallo:
> 
> For writing and web development, Connecticut has no idea. That was their
> official answer when I approached them two or three years ago. As a result,
> I charge my clients sales tax on the total cost of my jobs and I pass that
> sales tax along to the state, in the hope that if the state decides I
> shouldn't charge, it is up to the state to issue refunds <huge grin>.
> 
> Bear in mind, my deliverables are sometimes just HTML code on a server
> somewhere, or a PDF, or application files. Other times, I do hand over paper
> copy or a CD. Consider, too, that CT charges sales tax on such services as
> labor on automobile repair and the like.
> 
> Best regards from the confused state of Connecticut,