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So I have a sales tax question. Yes, I will be contacting an attorney, but I figured I should do some research before spending $$$. Here is a situation. A company based in state A (office + incorporation + all employees + all sales people) provides a business service for a customer in a state B. Service in the state B is provided by a local (in state B) 1099 contractor. Should there be sales tax charged for that location? |
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If I am not mistaken, you don't have to pay sales tax on services. Sales tax is generally reserved for physical objects that change hands (at least in California). Even if you have to pay sales tax for services, you should not have to if the service is done out of state. Usually you don't pay sales tax in another state. For example, if you buy sometime from a catalog or from a T.V. ad, if the vendor is out of state, you don't pay state sales tax. |
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Depends upon whether the given state where the work is performed requires/charges sales tax on services. |
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State sales tax laws differ on whether the tax is charged only on products vs services. Nexus issues may also be involved in whether you are required to pay/charge sales taxes. Conferring with a good tax CPA is best. |
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