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Tax question -- whole package price or breakdown?

cineski
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p.2 #1 · Tax question -- whole package price or breakdown?

I charge tax on the full package in CA, however I have heard in CA you only need to charge tax on physical, tangible items. I do business with many CA based companies that don't charge sales tax because they're not delivering a physical item (websites are a perfect example). Although CA is very strange with sales tax. Groceries aren't charged sales tax but a bottle has a $.10 CRV fee. Things transferred over the web aren't charged sales tax but an album is. I've also heard that if you do any sort of web transfer of an image, there's no need for sales tax. Again, this doesn't make sense to me because they're missing out on a lot of sales tax generated within the state. Although it's just like rent control. When you don't raise rents in a city like Santa Monica, you have people living in a 3 bedroom apartment paying $500 and then the new people who move across the hall have to pay $3500 to make up for the old renters. Of course I'm not a tax expert and am just repeating things I've heard.

Oct 17, 2012 at 01:29 PM

Scott Mosher
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p.2 #2 · Tax question -- whole package price or breakdown?

cineski wrote:
I charge tax on the full package in CA, however I have heard in CA you only need to charge tax on physical, tangible items. I do business with many CA based companies that don't charge sales tax because they're not delivering a physical item (websites are a perfect example). Although CA is very strange with sales tax. Groceries aren't charged sales tax but a bottle has a $.10 CRV fee. Things transferred over the web aren't charged sales tax but an album is. I've also heard that if you do any sort of web transfer of an image, there's no need for sales tax. Again, this doesn't make sense to me because they're missing out on a lot of sales tax generated within the state. Although it's just like rent control. When you don't raise rents in a city like Santa Monica, you have people living in a 3 bedroom apartment paying $500 and then the new people who move across the hall have to pay $3500 to make up for the old renters. Of course I'm not a tax expert and am just repeating things I've heard.

Thats correct. When I talked to the state board they said that if all images are emailed/FTPed then no sales tax. I can also bring a hard drive to their house and copy files over and that would be fine. If I were to leave them with a hard drive to copy the images over & leave for the day and pick it back up I'd have to charge sales tax. Gotta love California

Oct 17, 2012 at 01:50 PM

hardlyboring
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p.2 #3 · Tax question -- whole package price or breakdown?

I only pay tax on tangible items such as albums in Ohio so I do exactly what he is mentioning.
We do not tax services here just tangible items. Or at least that is how my accountant has been handling it.

Oct 17, 2012 at 03:56 PM

amonline
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p.2 #4 · Tax question -- whole package price or breakdown?

Scott Mosher wrote:
Thats correct. When I talked to the state board they said that if all images are emailed/FTPed then no sales tax. I can also bring a hard drive to their house and copy files over and that would be fine. If I were to leave them with a hard drive to copy the images over & leave for the day and pick it back up I'd have to charge sales tax. Gotta love California

This is true of nearly all states at the moment. My state tax rep actually "offered" that info to me when we spoke; trying to help. However, he said not to expect it to stay like that forever. lol Big brother will tax it as soon as there's significant revenue in it. I just don't offer that kind of delivery, and I doubt many do.

Oct 17, 2012 at 04:36 PM

RDKirk
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p.2 #5 · Tax question -- whole package price or breakdown?

amonline wrote:
Scott Mosher wrote:
Thats correct. When I talked to the state board they said that if all images are emailed/FTPed then no sales tax. I can also bring a hard drive to their house and copy files over and that would be fine. If I were to leave them with a hard drive to copy the images over & leave for the day and pick it back up I'd have to charge sales tax. Gotta love California

This is true of nearly all states at the moment. My state tax rep actually "offered" that info to me when we spoke; trying to help. However, he said not to expect it to stay like that forever. lol Big brother will tax it as soon as there's significant revenue in it. I just don't offer that kind of delivery, and I doubt many do.

Well, that's becoming par for the course for commercial work. All of my business work is now ftp or otherwise pulled off the internet.

Oct 17, 2012 at 05:07 PM

amonline
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p.2 #6 · Tax question -- whole package price or breakdown?

RDKirk wrote:
Well, that's becoming par for the course for commercial work. All of my business work is now ftp or otherwise pulled off the internet.

SHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!

Oct 17, 2012 at 05:31 PM

cineski
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p.2 #7 · Tax question -- whole package price or breakdown?

They're already missing out on a huge amount of revenue in CA. How many web designers reside in CA? Tons. None of them have to charge sales tax. This state really is screwy in most things but the issues with sales tax are at the top. But yeah, my commercial work is entirely FTP over the internet. I bet I could do the same with weddings. Would just have to do it differently and prettier than I am with commercial work.

amonline wrote:
Scott Mosher wrote:
Thats correct. When I talked to the state board they said that if all images are emailed/FTPed then no sales tax. I can also bring a hard drive to their house and copy files over and that would be fine. If I were to leave them with a hard drive to copy the images over & leave for the day and pick it back up I'd have to charge sales tax. Gotta love California

This is true of nearly all states at the moment. My state tax rep actually "offered" that info to me when we spoke; trying to help. However, he said not to expect it to stay like that forever. lol Big brother will tax it as soon as there's significant revenue in it. I just don't offer that kind of delivery, and I doubt many do.

Oct 19, 2012 at 03:04 PM

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