how do I charge sales tax

[xtremeny]

Hi I have started my new LLC business for IT support in NYC. how much I can charge sales tax?

[Freelancier]

Contact The New York State Department of Taxation and Finance.

Sales and use tax (http://www.tax.ny.gov/bus/st/stidx.htm)

You'll have to first determine if you need to tax customers, and (if you do) then fill out appropriate paperwork and get a tax number, then you can remit the sales tax as necessary per the rules.

[Harold Mansfield]

Yeah, definitely contact the department of taxation. I did an e-commerce site with NY taxes once and it was a crap load of tax rates depending on what part of the state and city. Not sure if services fall under the same rules.

[vangogh]

I agree with what's been said and I want to add one thing. You asked


how much I can charge sales tax?

I just want to make sure it's clear that you don't charge sales tax. You collect it for the state. You don't get to decide how much. The state decides that.

Say you sell a product for $10 and pretend the sales tax in New York is 10% so we can do easy math. When you sell your product for $10 the states says you have to collect an additional 10% or $1 for the state. You charge the customer a total of $11, give $1 to the state, and keep $10 for yourself.

However, you can charge whatever you want for your products or services. You could charge $11 and collect an additional $1.10 for the state if you want. You can't change the sales tax itself, though.

[Brian Altenhofel]

Definitely will need to find out from the state what products and services that you offer are subject to taxation. If you're doing on-premises IT services, you'll also need to determine when the state believes transfer of ownership takes place since New York is a destination-based sales tax state. There are many services available for figuring tax rates per location and product/service classification, some are free and some charge fees to the customer, but as long as they are accredited by the state most states will consider using those services as due diligence in the event that a wrong tax rate is calculated. Of course, check with a local tax accountant or tax attorney to be sure on how your state operates.

[xtremeny]

Thanks for all the replies. I got lot of info.

[tallen]

Just to note that it is really important to remember that the money you collect for sales taxes is not yours -- it belongs to the tax authorities the moment it leaves your customer's hand -- so you need to be very careful in accounting for those funds and making sure that the tax authorities get their money in a timely way.

[fossfolks]

I'm not sure how NY is, but TX and a couple other states I've had to deal with are crazy. There's a state tax, then county, then municipality. I've run into it working for a software company that sells software to lumber yards (so we have to set up all the tax codes -- which one gets charged depends on where the lumber yard is delivering products) Up in Maine, where I'm from, there's just one. And in NH, there's none! So check and make sure if it matters where in NY you're selling stuff, and does it matter whether it's a physical product, or a service.