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Thread: Tax Questions

  1. #1
    SitePoint Member
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    I just got my business license for web page design and have a quick question.

    When you design a web page for a client are you required to collect tax? A web page is a service, but it is also a product, so to speak.

    The same question for updates and changes, now you are only performing a service.

    I would appreciate any help. Thank You.

  2. #2
    Don't get too close, I bite! Nicky's Avatar
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    What country are you in?

  3. #3
    Your Lord and Master, Foamy gold trophy Hierophant's Avatar
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    The way it works in California is that you charge them for a service for all digital materials. If you sell them a copy of the site on CD or printed manuals then you charge tax on that portion of the sale only.

    The best way to find out though is to call your local Chamber of Commerce (or its equivalent) and ask to speak to someone in the chamber that is an accountant or tax lawyer. Some chambers require membership for this, others do it for free. If your just getting started though, membership will help you because only members get chamber referrals.
    Wayne Luke
    ------------


  4. #4
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    If you're in Canada, registration for GST is optional if your gross sales will not exceed $30,000/yr.
    m.


  5. #5
    Confirmed Halfwit
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    Do you have to charge PST? Or is that only for if you actually give them a CD and physical goods.. like Luke mentioned?
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  6. #6
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    I'm not sure if this will fit in conveniently with all business structures or all state or provincial taxation statutes.

    However, I've always charged clients for one thing only when building websites or doing custom scripting or programming: consulting services (or, if you wish, plain labor).

    Any hard copy, disk copies, graphical masters, etc. -- I simply give them... no charge.

    Obviously there can be downsides to this; but it does have the virtue of simplicity... especially in terms of untangling taxes.

  7. #7
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    Sales taxes are a state by state thing. Some states charge for certain service and products and not for others. You really have to check with people within your own state to know for certain.

    Contacting the COC is a good idea. You might also contact the state agency in charge of collecting sales taxes. I think it's the State Comptroller in Texas. A search around the state website might give you a clue.

  8. #8
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    hstraf,

    you need to register as a vendor to charge PST if you provide certain taxable services or sell taxable products. This list is from BC's One Stop Business Registration site:

    You are required to register if:

    You make taxable sales (i.e. clothes, liquor) or leases
    You provide legal services
    Sell taxable parking
    Provide taxable services (provided to install, assemble, dismantle, repair, adjust, restore, recondition, refinish or maintain tangible personal property)
    Sell a telecommunication service
    Sell propane
    Act as liquidator, receiver, receiver-manager or trustee and dispose of assets

    You DO NOT have to apply for PST if:

    You're selling only non-taxable goods such as fresh fruit and vegetables, educational or cultural books
    If you provide non-taxable services
    Wholesalers who do not make retail sales
    Contractors exclusively involved in construction or improvement of real property

    However, this is only BC. You'd need to check into your home province.

    m.


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