tax on out of state clients?

[shannonrae]

I think I already know the answer and I have left a message with my accountant. I had a client visit her mother from out of state and had a session done while she was here. She left to return home a couple of days later and now I have her session finished for purchase. Since the session occurred here in my state (Michigan), but she lives and is purchasing the photos from her state (Washington), do I have to charge her sales tax? I wouldn't think so, but I'm not 100% sure. Thanks for your help!

 

[KmH]

I'm pretty sure Michigan will expect you to charge her Michigan sales taxes.

 

[BlairWright]

Disclaimer: I am not a lawyer or CPA, nor do I live in your state...

Sales tax should only apply to prints, your time is not taxable other than income taxes. If you sold prints to this person I am 100% sure they are taxable otherwise you may want to consider getting a CPA to help.

 

[MLeeK]

In my state, if I deliver the goods out of state-they're not taxable by me. The client is responsible for paying sales tax due in their own state. You know that thing on your state income tax where it asks about purchases made out of state that you may owe tax on? That's it! Now if she were to come to your office to pick up the prints? Then it is taxable by you. Consider when you order something on-line from another state. Unless that store has a presence in your state, you don't pay sales tax. I have all of my adorama purchases shipped to my son who lives out of state. That way I do not have to pay sales tax. When you are purchasing a few grand in equipment? That's a chunk of change! So living outside NY state you can order from Adorama and not pay sales tax. However, if you visit NYC and purchase something from their store you pay sales tax because it is delivered within the state of NY where Adorama has sales tax jurisdiction.
I am also supposed to charge tax according to the county I deliver in. In my county sales tax is 7.75% but in the county next to me it's 8.25%. If I deliver to a client's house in that county I am to charge the sales tax according to the location of delivery.
There is a place on my sales tax forms for me to put in my GROSS sales and another place to enter my TAXABLE sales. The out of state deliveries get put into the Gross, but not the subject to tax amount. Same with photographs or widgets or whatever...
If you DO charge sales tax and report it to the state the state taxing authority is certainly not going to complain or fine you. However if you ARE responsible for the sales tax and don't collect then they tend to be a little bent.

 

[chadott]

Consider when you order something on-line from another state. Unless that store has a presence in your state, you don't pay sales tax. I have all of my adorama purchases shipped to my son who lives out of state. That way I do not have to pay sales tax.

I was told by someone at the department of revenue that if you order stuff online from out of state, you are actually responsible for collecting sales tax from yourself! But I'm not in NY, I'm in NE. And it is a pain in the rear to try to keep track of all the state tax and city tax when we service a rather large (geographically speaking) area. Almost all of our ordering is done through our website, so we set it up to charge sales tax for the city that our studio is in. It happens to be the highest level for the state.
I was also told by the same lady at the dept. of revenue that if someone feels like they overpaid sales tax based on their location, they can fill out a form and get a refund if it is over $2. I've never had anyone complain about it though. (I really hate dealing with sales tax, btw. It is probably the least fun part of owning your own business.)

 

[bennielou]

Ok here is a novel idea......look up the State Sales Code for your state:
Taxes - Sales Tax

Don't confuse the State Sales Taxes. There is one for buyers, and one for sellers. Two different things. Best thing is to wait for your Tax guy to weigh in. You have until the 20th to pay. Maybe call the County because they will be able to help you with your question.