Do I charge sales tax for out of country customers?

In general, the sale of merchandise to a resident of another country is taxable if the buyer takes possession of the item in this state—even temporarily—or uses the item before it is shipped abroad. However, some sales to foreign residents qualify as exports and are not subject to California sales or use tax.

Are service fees taxable?

An optional payment designated as a tip, gratuity, or service charge is not subject to tax. A mandatory payment designated as a tip, gratuity, or service charge is included in taxable gross receipts, even if the amount is later paid by the retailer to employees.

How much tax do I charge my customers?

The sales and use tax rate varies depending where the item is bought or will be used. A base sales and use tax rate of 7.25 percent is applied statewide. In addition to the statewide sales and use tax rate, some cities and counties have voter- or local government-approved district taxes.

Do I charge tax to US customers?

If your customers are in the USA you generally do not need to charge state sales tax unless you have a Sales Tax “Nexus” (ie. an office, branch, employee or warehouse based in the US). If you do, you need to charge and remit state sales tax based on your customer’s location.

Are exporters tax exempt?

Exporters can also elect to exempt a portion of their export profits from US Federal income taxation by establishing a foreign sales corporation. FSC’s are exempt from US federal income tax on a portion of their foreign trade profits that are generated through their dealings with their US exporter shareholders.

Do you charge sales tax on labor?

Whether labor is subject to sales tax depends upon the circumstances under which the labor is performed: If tangible personal property is not transferred, labor is not taxable. If custom-made items are sold at retail, labor is taxable.

Is there sales tax on consulting services in Texas?

Collect the 6.25 percent state tax (plus any local taxes) from your customer on the charge for your taxable service. This amount includes all expenses connected with providing the service.

How is service charge and tax calculated?

In some states, a service charge is taxable. In this case, you’d add the service charge to the bill before calculating the tax. For a $1,000 bill with a 20-percent service charge and an 8-percent sales tax, the final total would be $1,296.

Are business to business sales taxable?

Most B2B transactions qualify for a sales and use tax exemption, but that doesn’t mean they’re statutorily exempt. If they’re set up to collect sales tax, they may not allow tax-exempt sales — they’ll automatically apply sales tax to all transactions, even those that should be exempt.

Do I charge my overseas clients GST on consulting services?

Do I need to charge Goods and Services Tax (GST) on sales to overseas customers? Exports of goods and services are generally GST-free. If you’re registered for GST, this means: You don’t include GST in the price of your exports.

Do I charge GST on consulting services?

Unlike employees, almost all independent contractors will need to charge GST/HST for their services. This will apply whether they are incorporated or not (i.e. a sole proprietor).

Do I have to pay taxes on consulting fees?

For many of those, dealing with taxes on consulting fees is a headache — one that confuses and frustrates even the most number-savvy people, on par with the difficulty presented to some by contract templates or statement of work templates. However, independent consultant or self employment taxes aren’t optional.

Are exports to foreign clients subject to sales tax?

Exports to foreign clients are not subject to sales tax. That sounds open and shut, but in practice it gets complicated. States have no intention of letting someone avoid sales tax just by saying he’s taking his purchase to another country. To avoid your state demanding its sales-tax cut, you’ll probably have a few hoops to jump through.

Do origin-based businesses have to collect sales tax in another state?

You might be obligated to collect that other state’s sales taxes and file a sales tax return there even if your primary location is in an origin-based state. It doesn’t matter if your customer picks up their product if you operate in an origin-based state because all your sales are subject to your state’s sales tax anyway.

Do I need to file a tax return for consulting work?

Any income you make must be reported on your tax return. If you do consulting work for three or four companies, they will all report your earnings to the IRS. As such, you need to do your part. If you earn less than $400, you won’t owe the IRS any tax. That being said, you should still file a return for the tax year, to stay on the safe side!