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State tax question....


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Does your accountant hire out for weddings?





You should be able to contact your state sales tax office and ask them directly. (My guess: if you deposit the money in your business account, and the client does not hold a sales tax exemption certificate [i.e., school or church,] then sales tax is probably collected.)

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Generally speaking, when the point of delivery is outside your own state you are not required to charge sales tax. But, gerald is right, a quick phone call to your state dept. of revenue would give you the most accurate info.


Sales tax rules and regs vary from state to state. I'm in Nebraska and when I sell prints (very rare) to a customer in Nebraska I have to collect sales tax unless the client is exempt. When I license images for use to a client in Nebraska I don't need to collect sales tax because that transaction isn't taxable under Nebraska law. The same goes for when I license images for use to a client in a different state.

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As noted; find an accountant.<BR><BR>In some states; the freight/postage/ups is a taxable part of the sale; of an instate transaction that is mailed instate. Just because a person has a tax-id number doesnt mean that they doent have to pay state tax. A contractor might hire you to shoot some construction progress photos of his site; and then wipe out his tax id; and demand "no-tax". This gambit saves him money; but YOU are the fall guy/gal if caught by the tax man. Since the contractor is the end user; he should pay sales tax; unless he has a direct pay tax number. When audited; you will have to pay the tax; unless you can find the rat three years later; and try to collect; or the tax man to collect. Then the tax man will be getting the back taxes; plus penalities; plus say 3 years interest. We had this happen to us about 12 years ago; figure that you will pay for it all; say triple what the actual 5 to 8 percent tax actually is.....If the tax id number from your client is just a hand written number; without a copy of the "tax-id"; figure that it might be wrong; or a bluff.......Your ignorance of not getting documentation means he has no lead to follow; thus you pay............Here; the tax man wants us as a printer/photographer to pay sales tax on most all consumables; not directly used in production. Thus the ink; paper; film we use is not taxed; we tax folks for our goods. The paper clips; shipping tape; advertising materials; coffee cups; boxes; that we mail order are taxed; even if ordered from out of state. When audited here; they want the sales tax that they didnt get; because of an out of state transaction. It all sounds like not a big deal; untill one gets dragged over the coals by a tax person; and every stone is unturned; all things are checked. Since states are short on cash; this auditing is very profitable.
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