hi!

i'm VERY new, but i just read a post and taxes were mentioned. do you ALL charge taxes?

Lynnette,

Are you talking sales tax? It depends on the state. Here in PA I must charge sales tax on certain services (mostly secretarial) if the client is in state.

Many new business owners forget that you still have to pay Federal Self-Employment taxes, state income taxes and local wage taxes (if they apply).

You can check with the IRS, State and local tax departments to see what you are responsible for. You can also check out SCORE and the SBA to see if there is a local office that can also give you this information.

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Lee Drozak
My Office Assistant

thanks so much! i appreciate your response - i'll check with my local irs office to see what their guidelines are. thanks again!

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Lynnette Corrales, Owner
http://www.crackedacornconnections.com

I have not charged taxes on any of my services and I have operated my business from Washington state and now, Oregon. I didn't realize there were *any* states where services were taxed but recently saw another thread here on VAF from a VA who must charge tax, so yes, I agree with Lee, check with the resources mentioned to get the answer for your own location.

I'd be interested to hear back if you DO need to charge tax...

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Hi,

While I know it doesn't apply to VAs in the US, here in Canada one of taxes we have is the GST, a federal goods and services tax. While VAs are not required to collect GST as the outset of their business, once they earn $30,000.00 within four consecutive calendar quarters they must register and collect the GST.

My self-employment instructor also suggested we register for it voluntarily before we hit that 30k in earnings as most Canadian businesses will be aware that if you are not charging GST then you haven't earned 30k yet.

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Kate V. Kerans
Kerans Virtual Assistance

As part of my startup research I recently talked to a lady from the WA State Tax Office and described what services I expect that I'll be offering. She told me that if there is no tangible product then there is no need for me to charge sales tax to WA clients. Phew!

HOWEVER...if say I create a document, have Kinkos print it, then I pick it up to deliver it to the client she suggested that I will need a wholesale resellers permit (free). Without this Kinkos will charge me sales tax on the print job and apparently it is not good practice to just charge that receipt to the client. I was told that the resellers permit will enable Kinkos to "sell" me the brochures without tax. Then when I invoice the client, I add the cost of the goods along with the relevant sales tax based upon the physical address of the client, not my location. She explained that the sales tax here in WA State varies depending on the point of delivery to the customer.

Overall, the key factor was if I handled tangible goods. If I sent the document to Kinkos and the client paid Kinkos directly for the printing service and delivery, then I don't have to worry about sales tax as I haven't handled the tangible goods and Kinkos will take care of it.

Confused yet?

I asked about taxing out of state clients and she said she could only advice on WA State Taxes so hopefully I am in the clear in that respect. I guess if in doubt, I just won't handle tangible goods.

I can't wait to read about other people's experiences on this topic.

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Linda
Clockwise Virtual Assistance

I have worked in Sales and Use Tax compliance and audits for the last 6 years. In general most states do not tax professional services (althought there is a lot of talks of doing so as part of the streamline sales tax project) because we do not offer a tangible product as part of our service. I would recommend contacting your State's Department of Revenue for some guidance. I work in GA and we do not have to charge sales tax for professional services.

Most definitely contact your state's business tax department. I live in Florida, and I called my state's department because I was concerned with that same issue. I was told that as long as my services do not involve an actual "physical" good, such as a printed transcript, a CD, a tape, ... well, you get the picture ... anything tangible, then sales tax does not apply. But as stated, each one of our states operates a little differently. So the best way is to contact your state's office. This was a great question!

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Patty

Thank you Patty! Just what I was looking for!!!! I'm in South FL. Where are you?

I am still in the start up stages in Canada, wow...I am thinking this is going to be harder than I thought, as I want to be able to offer print services as well. I guess I better get cracking and really look into all these taxes...