Sales and Use Tax Consulting Services

Whether services are subject to sales tax depends on the state. Some states tax a wide range of services, while others tax very few or none at all. Commonly taxed services include repair, installation, and personal services. Check your state's tax guidelines to determine if the services you offer are taxable.

By conducting a sales tax nexus study, you can pinpoint the states where you have surpassed the nexus thresholds. You will need your physical locations and sales records from previous years to analyze both revenue and transaction numbers per state.

The sales tax rate you charge depends on the location where the sale occurs. This includes the state, county, city, and sometimes special district rates. To determine the correct rate, you can use tools like state government websites, sales tax rate lookup services, or tax software that calculates the combined rate based on the delivery address of the goods or services.

Use tax is a tax on the use, storage, or consumption of goods and services when sales tax was not collected at the time of purchase. You typically need to pay use tax if you purchase taxable items from out-of-state vendors or online retailers who do not charge sales tax. The use tax rate is usually the same as the sales tax rate in your state or locality.

The states that do not impose a state sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon. However, some local jurisdictions within Alaska may still impose sales taxes.

Nexus is the connection between a taxpayer and a state, ultimately deciding when the state has the jurisdiction to levy taxes on the taxpayer.

It depends on the amount of sales and number of transactions.

Before 2018, a taxpayer was only required to register for sales and use taxes if it had a physical presence in the state. Generally, a physical presence was established by having people or property in the state on a regular and systematic basis. As a result, true remote sellers did not have a sales and use tax registration requirement. In 2018, the Supreme Court ruled in South Dakota v. Wayfair, Inc., 585 U.S, a mere economic presence was enough to establish a sales and use registration and collection responsibility. The Court did not provide guidance on the exact economic thresholds that need to be met to cause a registration and collection responsibility. Instead, it ruled that South Dakota’s threshold of $100,000 in annual sales or 200 individual transactions in a year was reasonable. As a result, each state has developed its own economic nexus thresholds.

Therefore, we strongly suggest working with a state and local tax professional to review these requirements on a state-by-state basis to ensure proper registration steps are taken to be in compliance.

Sales tax is a tax imposed on the sale, transfer, or exchange of goods and services. It is typically calculated as a percentage of the purchase price and included in the final cost for the end user or ultimate customer.

The sales tax rate varies depending on the location, with individual states and jurisdictions setting their own rates. In the United States, sales tax is not imposed at the federal level but is rather a state and local tax.

Use tax is a tax imposed on the use, storage, or consumption of goods and services acquired without paying sales tax. The rate often mirrors sales tax and is typically enforced by the state or jurisdiction where the goods or services are used.

The purpose of use tax is to ensure that individuals who purchase goods and services from out-of-state vendors or online retailers contribute the same tax amount as if they made the purchase locally.