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Taxability

Tax on Specific Products or Services

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Within any given jurisdiction (and there are thousands), sales tax decisions and rates can vary greatly depending upon the product (or service) sold or purchased. Companies with multi-state activities need to consider those varying factors - but also how each jurisdiction even defines each of those products or services. While this has always been a challenge, rapid technological innovation has compounded this issue. Given our digital world, it's no surprise that there will be inconsistencies when it comes to defining products that can't be seen or felt.

We receive many requests to provide taxability data for a particular product or service. While we respond to many such requests (which can easily be viewed in the Sales Tax Questions archives using the "By Industry" drop downs or site search feature) we can't unfortunately respond to each - in particular those which request taxability information for a large number of jurisdictions - and/or pertaining to products which are not defined consistently.)

Both of these scenarios can involve substantial research time and while we are able to provide such information, we can only do so as part of a consulting engagement. (Please visit the YETTER services page discussing Taxability Analysis & Research or contact YETTER if you would like to discuss such services.)

Taxability Decisions Options:

So where do you go to find taxability decisions? There are several options available to the average small-medium business:

State (DOR) Offices: State Department of Revenue (DOR) offices offer several sources of information. Many of the DOR web-sites provide a broad range of taxability information (see our [State (DOR) Sales Tax Resource Links section](/sales-tax-information/states-sales-tax-by-state/CA-California/dept-of-rev-dor-sales-tax-forms)). Another option if you can't find information posted on the DOR site - or if you want to receive a written opinion regarding your particular product/service offering, is to send a request to the DOR office. However - such requests should be handled very carefully. We generally recommend that you have a third party advisor (such as an accountant or attorney) submit the request on your behalf, without revealing your company identity. (YETTER is available to provide such services as well).

Taxability Decision Databases: There are a number of vendors which offer taxability decision databases. In some cases, a subscription to such services can provide users with access to a broad range of tax data including a tax decision matrix. Other vendor offerings may be limited to a taxability matrix for a particular industry. Costs and features vary substantially by vendor so it's important that you review a solution carefully to ensure that it meets your information needs. (Note: Many vendors offer 7 day trial subscriptions to assist you in that evaluation process.) Products to consider include - CCH, Thomson Reuters, LexisNexis, BNA, Industry Sales Tax Solutions

Taxability Consulting: In some industries, sales and use tax issues can be highly specialized and it is very important to work with an experienced professional who understand the industry-specific issues.

Taxability Assistance and Other Resources:

If you require assistance regarding sales tax issues, YETTER is available to provide a broad range of services. Please call Diane Yetter at 312-701-1800 to discuss your requirements. The Sales Tax Institute also offers classes which review sales tax basics - through to advanced issues and best practices.

See the CURRENT list of all Sales Tax Institute Online Courses & Webinars - Including Puerto Rico VAT Reform.

Don't forget about these additional TAXABILITY resources: Sales Tax Institute's "News & Tips"

Are you a multi-state company with a question that we have not yet covered here - or in our Sales Tax Archives (below)? If so - Submit it here.

Sales Tax Questions - Taxability

Filter by topic or industry using the dropdown menus, or use the search field to filter by search term.

Question/TopicDateTopicsIndustries
We will provide nationwide computer support by phone and remote log-in, but are only in 1 state. What about sales tax?2015-05-28Internet Taxation
Nexus
Taxability of Product or Service
Computers / Technology
E-Commerce / On-Line Sales
Client asked in which states our products are tax-exempt. How do we locate such information?2015-05-28Compliance - Basics
Internet Taxation
Taxability of Product or Service
Clothing
Promotional Items
When repairs are performed by a repair shop under our contract, when are these repairs taxable?2013-07-09Compliance - Order Sourcing
Taxability of Product or Service
Automotive Related
Service / Maintenance Agmts
I'm trying to determine how each of the 50 states taxes web hosting services. Can you point me in the right direction? 2013-07-08Compliance - Basics
Taxability of Product or Service
Digital Products
E-Commerce / On-Line Sales
How do we determine if we need to collect sales tax in various states? 2012-08-06Nexus
Taxability of Product or Service
Employment Services
Are storage charges taxable on sales made to a customer in California? We have nexus in California2012-07-31Taxability of Product or ServiceStorage Fees
I am web designer. Do I charge NY sales tax for services like web design, consulting, SEO, programming -or selling advertising on websites?2012-07-28Internet Taxation
Taxability of Product or Service
Computers / Technology
Digital Products
If I take photographs for a customer on their SD card and give it back to them, is sales tax due, even though no physical products is exchanged?2012-02-18Taxability of Product or ServiceDigital Products
Photography
Need to know if the support for software is taxable for use tax?2012-02-05Taxability of Product or Service
Use Tax
Computers / Technology
Government Contractor / Business
I have a photography business in LA which will offer a package which includes services- as well as digital photos on a CD. Should sales tax be collected? 2012-02-02Taxability of Product or ServiceDigital Products
Photography
I am confused about the taxability on software maintenance agreements? Is this taxable in part or in full? 2011-12-29Taxability of Product or ServiceComputers / Technology
Digital Products
Service / Maintenance Agmts
What about NY tax on monuments - wholesale and retail on new memorials, as well as lettering on existing memorials?2011-12-26Taxability of Product or ServiceFuneral Home / Cemetery
Can companies which provide technology support charge us sales tax? 2011-12-23Taxability of Product or ServiceComputers / Technology
Service / Maintenance Agmts
We provide personnel to perform fiber optic and pipeline inspection throughout the US. Should we be charging sales tax? 2011-09-02Taxability of Product or ServiceConsulting
Inspection Services
Installation / Parts / Repairs
Which states exempt human dietary supplements/vitamins from sales tax?2011-08-16Taxability of Product or ServiceDirect Sales / MLM / Distributors
Food / Wine / Restaurants
We purchase cabinets and granite counter tops from a vendor and resell. Is it considered real property and if so - are we liable for collecting sales tax? 2011-08-07Compliance - Basics
Taxability of Product or Service
Installation / Parts / Repairs
If we are selling screen doors to people in NC and SC, do we charge sales tax? 2011-08-06Taxability of Product or ServiceInstallation / Parts / Repairs
We are an IT Managed Services company and provide most services over the Internet remotely. Should we charge sales tax on services?2011-08-05Taxability of Product or ServiceComputers / Technology
Consulting
Must we charge sales tax on the fuel surcharge portion of our delivery costs to our customers? 2011-06-25Taxability of Product or ServiceAppliances / Furniture
If we sell and install storm doors and kitchen counter tops, the contract is without sales taxes on labor or materials. What if customer buys only materials? 2011-06-24Taxability of Product or ServiceAppliances / Furniture
Installation / Parts / Repairs
I sell computer software which I developed. Do I charge sales tax when product is delivered via electronic file download or CD? 2011-06-21Taxability of Product or ServiceComputers / Technology
Digital Products
Is Computer software subject to sales-use tax in the District of Columbia?2011-02-23Taxability of Product or ServiceComputers / Technology
Digital Products
I have to join a software project network. I am buying right to do work. Should there be sales tax on the membership invoice? 2010-12-30Taxability of Product or ServiceComputers / Technology
Consulting
Membership Fees
Is there a sales or use tax to be paid on memorials -and are funeral homes exempt compared to monument retailers?2010-06-17Taxability of Product or ServiceFuneral Home / Cemetery
What if IA company receives contract with company Y located in NE to install piping for chemical storage facility. How do we manage tax-free inventory?2010-01-27Compliance - Issues
Taxability of Product or Service
I have a client who teaches classes about the stock market. They also sell tapes. What is subject to sales tax in CT if any?2010-01-15Taxability of Product or ServiceTraining / Seminars

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