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Tax Question. Does your state tax websites?!?!

by rbecklund
3 replies
I met with my new CPA and he informed me that in Texas I have to pay sales tax on websites sold to people in Texas. Websites are considered taxable since they are products - even though you can't hold it in your hand, when you make a website you are making a product.

SEO is different, you are providing a service (in Texas).

My CPA said we should get our sales tax number ASAP. If you do have to pay sales tax on websites in your state you need to think about the start date you give them. If you started 6 months ago and you tell the taxing authority that, you probably will be liable for taxes on all the websites you created in the last 6 month - so be careful.

Taxes don't get talked about too much in this forum, but I have seen a few people get royally f*cked because they did not pay their taxes properly. Don't be one of those people.
#question #state #tax #websites
  • Profile picture of the author iAmNameLess
    What? lol.

    You're selling websites as a product instead of selling it as a web design service? Are you flipping sites? I'm not understanding why you would need to do sales tax?

    You aren't making a website and packaging it as a product, you're providing web design services for someone else.... I would talk to another CPA. I'm not one, so I may be talking out of my ass, but I really don't think that is correct. I would bet that isn't correct...
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  • Profile picture of the author iAmNameLess
    I just want to expand on this....

    If you print out the hard code of the website or send them a CD as a back up of their site, or a hard copy of a logo, then it is taxable. If you are uploading a website on a server for another business using your web development SERVICES then it is not taxable unless SERVICES are taxed in your state.

    Also... is the website hosted on a server in texas? I don't see how a service can be taxed, and if they want to consider it a product, how can they force state taxes on something not in the state? I have a cousin in texas that is a CPA, I might give him a call tomorrow and ask for sure. Either way though, I think you should talk with another CPA.
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    • Profile picture of the author globalpro
      I would be curious what he says and also agree to get another CPA opinion on this, or maybe call the Dept. of Revenue for the state to verify.

      Sometimes you get people that don't fully understand sales on the Internet, so what they tell you may not be correct. Even the US Congress can't agree on how this works. Is why they wanted to just tax everything, but that didn't fly... yet.

      Thanks,

      John

      Originally Posted by iAmNameLess View Post

      I have a cousin in texas that is a CPA, I might give him a call tomorrow and ask for sure. Either way though, I think you should talk with another CPA.
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