Charging Sales Tax

CVM wrote on 3/14/2011, 7:08 PM
In the State of New York, wedding videography is a taxable service. No matter if you do wedding videography professionally, semi-professionally, or just a few times working out of your house, NYS wants sales tax on the ENTIRE bill-of-sale... not just the 'tangible product' (e.g. Bluray, DVD, etc). This was confirmed by a quick phone call to the NYS Department of Taxation and Finance.

In NY, wedding videographers are to register on-line (www.NYS-permits.org) and receive a unique Tax ID number, and then charge the applicable sales tax of the county where the product is being delivered to (not the county we shot it in... or where we live).

But what about out-of-state? NYS could not offer an answer to me. How do we collect sales tax from other states? Do we need to get a Tax ID number there as well?

What say you? :-)

Comments

musicvid10 wrote on 3/14/2011, 7:22 PM
All states have different laws and requirements. Few will be as stringent as New York, and if you are only doing a job or two across state lines, it "may" not be worth their time to pursue it. For instance, at least one state does not require a business license if you do <$2,000 in sales in a calendar year.

As always, consult a tax attorney in your state for legal advice and to find out what states might require you to get a separate business / sales tax license.
TheHappyFriar wrote on 3/14/2011, 8:01 PM
If any other state is like NYS then it's up to the individual state to collect the tax from the purchaser. Just like how buying over the internet/mail order is.

Good look dealing with NY though. NY is the location of the highest taxed county in the entire country AND it a complete pain to deal with. Also don't forget you don't get the sales tax $$, set it aside for paying later.

EDIT: don't forget you'll also need to pay self employment tax on your tax return (~25% of your total $). :D

I enter any video work I do as miscellaneous self employment income. I also claim any expenses I have. :D It's not much (under $1k a year) but you'll quickly see why NY has a population drop in no time! Me & my wife pay ~25% of our income to income tax, another ~10% to property tax (school/town) & ~9% of half of the remaining on sales tax for things we buy. :) That means out of ~$30k we pay ~$11k a year in various taxes just for living in this wonderious state. :)

If you're doing this as a business I'd suggest you keep very good records& hire a tax guy for at least the first year. If you're doing this on the side occationatly I wouldn't worry about anything special, just report it as misc income.
Steve Mann wrote on 3/14/2011, 8:56 PM
"EDIT: don't forget you'll also need to pay self employment tax on your tax return (~25% of your total $). :D"

It's been 15% for as long as I can remember.
TheHappyFriar wrote on 3/14/2011, 9:16 PM
SS + Medicaid add up to ~25%. I think you're right though & the actual tax is 15%.

I just remembered something though. You're not selling a good, you're being hired as an independent contractor. You're no different then my wife doing medical transcription from home (she doesn't collect sales tax on each report she finishes & sends in). There is no sales tax on that, sales tax is for goods/services, not employment. I'd get a hold of an accountant & ask them but you're no different then the people getting married hiring a wedding planner or someone to remodel their kitchen.