Taxes on Design Labor
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- capn_ron
So how do you all do it? Do you tax on your design labor, or just tangible items.
example: I do a web update for $300 for a friend. Do i then have to tax him as well?
I know I have to tax on items I buy for a project and do not get taxed on. I also know you have to tax when you sell tangible items such as a printed piece. I just don't kknow about how to tax the labor on a design only job.
Did I mention that I hate dealing with this side of design. I think they should force designers to take business classes in college.
- Ewak0
personally I would not charge a tax just sure your rate covers a little extra.
- Josev0
Some states require you to charge sales tax on your time. You should ask your accountant. Massachusetts only charges sales tax on tangible items. When I lived in Ohio the design firm I worked at was hit with a 18k bill from the state for back sales taxes.
- and States are usually harder to deal with than the IRS.Josev
- capn_ron0
Thanks Josev. I have heard from many designers/firm here in California that some charge the sales tax and some don't. So i keep getting mixed signals. I'll ask our accountant for a definitive answer.
- bulletfactory0
sales tax for intellectual property? i could see charging tax if you initially purchased any printing materials from the print shop, and the re-charged the client, or purchased some images, and passed the cost along, but (at least in my state, MO), i don't believe they tax intangibles.