How many of you actually charge your customers tax for hosting services? I know here in California we should be passing the weight of tax to our California customers but I tend not to do that. For some reason I feel that people would be detoured from my services if they saw a tax percentage factored in.

Well if you are supose to be charging them tax then that is what you are supose to do. If another company is supose to be charging them tax that is what they should be doing as well. Shouldn't be what you want or do not want to do, its the law start charging taxes for Cali customers.

Actually as long as you pay your taxes, they really don't care. It is just how it breaks down. I will look into this more and find out what should be done.

So you are saying you factor in the tax in the price of your service and you still pay that tax to the gov?

Correct. Deliberately adding tax onto a price looks bad to the customer.

I agree, factoring tax into the price is a much better method. When targeting a completely local market then adding the tax on at checkout is fine, but when facing a global market not everyone will be happy when they see the little extra fee in there.