should I charge sales tax?

**n/a** · 08-25-2007 01:35 PM

Ok here is the deal.

As everyone knows I do graphic design. Every time i send an invoice (i use paypals invoicing tool) I do not charge income tax. Is this something I should start doing? Would you expect to pay sales tax on a service like this? To me it feels weird to charge tax but I know it will help me out come tax time. I know there are several graphic deisgners on this fourm what do you do? Do you send an invoice for lets say 39.99 for a logo or do you charge them 39.99 plus some sort of tax?

Thanks!
Lindsay

**LGSShaun** · 08-25-2007 02:14 PM

Originally Posted by lamarsh

Ok here is the deal.

As everyone knows I do graphic design. Every time i send an invoice (i use paypals invoicing tool) I do not charge income tax. Is this something I should start doing? Would you expect to pay sales tax on a service like this? To me it feels weird to charge tax but I know it will help me out come tax time. I know there are several graphic deisgners on this fourm what do you do? Do you send an invoice for lets say 39.99 for a logo or do you charge them 39.99 plus some sort of tax?

Thanks!
Lindsay

Graphics Design is a business that has to charge sales tax unless your state doesn't require it. The state of TX does. However, if the customers you do work for are reselling your product to a 3rd party customer then you do not have to charge sales tax (but if so make sure to get all required proof of tax exemption from your custmers). Chances are since you are doing logo design though you are already dealing with the end customer. You need to contact your state comptroller and file for a tax ID# which if you are working under a DBA will just be your social security number. They will be able to tell you though if in fact your service is taxable.

**Cole Taylor** · 08-25-2007 02:28 PM

I think you are confusing "income" tax and "sales" tax. The question is whether or not you need to charge sales tax. First, I would check with the Virginia dept. of taxation to determine if your service is taxable.

Im general, items, not services (with execptions) have a sales or use tax imposed on them. You are responsible for collecting this tax on the sale of goods and forwarding it, usually quarterly, to the proper taxation authority.

You would collect tax only on sales to VA residents, not residents of other states. Again, check with your state dept of taxation to determine if your services are taxable, my bet is no.

**wully00** · 08-25-2007 04:40 PM

Originally Posted by lamarsh

Ok here is the deal.

To me it feels weird to charge tax but I know it will help me out come tax time.

If you are collecting sales tax, its due monthly and doesn't help you come tax time :-(

In Illinois you don't usually collect sales tax for services. On the same note, collecting when you shouldn't be is bad... And I'm not sure but in IL I never* have to pay sales tax outside IL

**dhandaulat33** · 12-28-2007 01:15 AM

Hello everyone, if I make money from online advertising and affiliate programs how will I am taxed? I am concerned that I will have to pay tax on the entire amount of money made even though a good portion of the money made goes to pay advertising bills that allow me to make that money in the first place. Have you got any information regarding my problem?

**iDuke** · 12-28-2007 01:39 AM

Originally Posted by dhandaulat33

I am concerned that I will have to pay tax on the entire amount of money made even though a good portion of the money made goes to pay advertising bills that allow me to make that money in the first place. Have you got any information regarding my problem?

How is your income being taxed? You need to consider gross vs. net profit.

For myself, it is added to my annual personal income (and not filed seperately as a business), so therefore I only include the net.

**wully00** · 12-28-2007 07:30 PM

Originally Posted by dhandaulat33

Hello everyone, if I make money from online advertising and affiliate programs how will I am taxed? I am concerned that I will have to pay tax on the entire amount of money made even though a good portion of the money made goes to pay advertising bills that allow me to make that money in the first place. Have you got any information regarding my problem?

I agree with Duke, I think you're more talking about taxable income? As you were saying about advertising-- thats why tax deductions become so vital to business success.

**heygeek** · 12-28-2007 09:50 PM

You only have to charge/pay sales tax on sales to customers who live in the state where you live (this is not applicable in some states like NH, where there is no sales tax). Income tax is completely different and is something that only concerns you, not your customers.

**4CraveEnergyDotcom** · 12-29-2007 12:10 AM

Some of ya'll need to see an accountant fast! Or get some lessons from an advisory service like SCORE. Every state is probably different on the sales tax part.

Investigate or pay for some advice OR you will pay BIG later.

DS

**BusinessAdviser** · 12-29-2007 12:21 AM

Originally Posted by 4CraveEnergyDotcom

Some of ya'll need to see an accountant fast! Or get some lessons from an advisory service like SCORE. Every state is probably different on the sales tax part.

Investigate or pay for some advice OR you will pay BIG later.

DS

Best advice I've heard all day. As a rule of thumb, if other people go to school for years for both the knowledge and privilege to offer certain advice and services, defer to them for such advice and services, rather than just to others in the exact same situation as yourself.

**iDuke** · 12-29-2007 01:26 AM

Originally Posted by 4CraveEnergyDotcom

Some of ya'll need to see an accountant fast! Or get some lessons from an advisory service like SCORE. Every state is probably different on the sales tax part.

This is true. Thankfully, in my region, tax is not required until your annual sales total more than $30,000 -- I am a big supporter of this method. "Keep It Simple, Stupid!"