I had an interesting discussion with a member on another forum regarding US taxes for web hosting and if they should be collecting taxes or not.
The conversation went in many different directions, even SaaS and if that's a taxable item.
The default answer from everyone is "no, it's a non-tangible product and can't be taxed" but this also depends on your State and the item that they purchase.
In Utah for example, you are required to collect taxes for the state. This is also true for your customers if they live in that state. This means, if your company is operating out of Georgia for example, you must collect and remit taxes for the customer in Utah.
I'm not wanting to call out individuals or hosting companies on whether you do or do not collect taxes for customers, so I'm not sure how to proceed with the conversation here, but it's certainly something worth investigating.
Many tax laws have changed over the past 10 years, 5 years and even 3 years. Have you kept up with them?
The following applies to NEBRASKA - your state may differ
In Nebraska, we are not required to collect taxes for Web Hosting, Domains, Web Design or SEO.
Computer software training is not taxed, unless you sell the software, at which point the software and training are taxable.
Ruling from 2010, still on the books today - "Web site service provider for web site design and development are not subject to tax unless the web site design is transferred to the consumer on a tangible storage medium" - No tax for web design unless you provide a copy via thumbdrive etc - https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr011002.pdf
Web site hosting is not currently a taxable item in Nebraska, unless the consumer purchases a server through the hosting company (a physical machine that the consumer now owns and would be shipped to the user upon account cancellation).
Have you investigated the taxes in your state? Are you required to collect for persons only in your state, or for other states, or not at all?
The conversation went in many different directions, even SaaS and if that's a taxable item.
The default answer from everyone is "no, it's a non-tangible product and can't be taxed" but this also depends on your State and the item that they purchase.
In Utah for example, you are required to collect taxes for the state. This is also true for your customers if they live in that state. This means, if your company is operating out of Georgia for example, you must collect and remit taxes for the customer in Utah.
I'm not wanting to call out individuals or hosting companies on whether you do or do not collect taxes for customers, so I'm not sure how to proceed with the conversation here, but it's certainly something worth investigating.
Many tax laws have changed over the past 10 years, 5 years and even 3 years. Have you kept up with them?
The following applies to NEBRASKA - your state may differ
In Nebraska, we are not required to collect taxes for Web Hosting, Domains, Web Design or SEO.
Computer software training is not taxed, unless you sell the software, at which point the software and training are taxable.
Ruling from 2010, still on the books today - "Web site service provider for web site design and development are not subject to tax unless the web site design is transferred to the consumer on a tangible storage medium" - No tax for web design unless you provide a copy via thumbdrive etc - https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr011002.pdf
Web site hosting is not currently a taxable item in Nebraska, unless the consumer purchases a server through the hosting company (a physical machine that the consumer now owns and would be shipped to the user upon account cancellation).
Have you investigated the taxes in your state? Are you required to collect for persons only in your state, or for other states, or not at all?
