Is sales tax charged on translation jobs in the US? Thread poster: C.A.Joseph
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C.A.Joseph France Local time: 11:23 English to French + ...
Hello, I am currently translating a business plan for a customer who is about to start US based company (subsidiary) in Delaware. I need to get a better understanding on how sales taxes work in the US. In Europe, we have VAT that is charged to all customers located in Europe. How does this work in the US? For example when you (US based translator)invoice a translation job to your customer. What kind of taxes do you charge? What are they called? Do they var... See more Hello, I am currently translating a business plan for a customer who is about to start US based company (subsidiary) in Delaware. I need to get a better understanding on how sales taxes work in the US. In Europe, we have VAT that is charged to all customers located in Europe. How does this work in the US? For example when you (US based translator)invoice a translation job to your customer. What kind of taxes do you charge? What are they called? Do they vary from state to state? Any help would be much appreciated. Thanks ▲ Collapse | | |
Dyran Altenburg (X) United States Local time: 06:23 English to Spanish + ... Sales tax for translations | Jun 1, 2003 |
What kind of taxes do you charge?
None (Pennsylvania) What are they called?
N/A Do they vary from state to state?
Yes (where applicable)
[Edited at 2003-06-02 15:34] | | |
NO sales tax on professional services | Jun 2, 2003 |
there are no sales taxes charged or collected on professional services - at least not for the moment. Sales tax is charged on "tangible items", though not all - depends on the state. If you are still in doubt, contact the department of revenue services or commissioner of revenue services in your state - or better yet your accountant. mj | | |
There can be State Sales Tax | Jun 2, 2003 |
What has been said so far is true on the Federal Level. Depending on the state in which one lives, there can be a sales tax if you deliver an actual physical document to a customer in the same state. | |
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Henry Hinds United States Local time: 04:23 English to Spanish + ... In memoriam
In Texas, sales tax only covers sales of merchandise; that is, physical items. But I hear that in New Mexico all businesses, including translators, have to pay a "gross receipts tax", about 6.5%, what a drag. There are only 50 states and they all have their rules on these things. | | |
Susana Galilea United States Local time: 05:23 English to Spanish + ... Illinois, anyone? | Jun 2, 2003 |
No sales tax for translation assignments in New York state. It had not even occurred to me this might be different in other states...I just moved to Illinois, guess I'd better make sure! | | |
Edward Potter Spain Local time: 11:23 Member (2003) Spanish to English + ...
Delaware is the most popular state to incorporate in as the taxes there are very low. Sales tax and value added tax (VAT) are slightly different taxes. Each state has different sales tax laws. Approximate sales tax rates, from memory, are: New York 4.0% Virginia 3.5% Maryland 5% Idaho 0% (in an attempt to populate the state) Montana 0% (ditto) D.C. 5.75%. Delaware 0% New Hampshire 0% However, they keep changing them, usually downward... See more Delaware is the most popular state to incorporate in as the taxes there are very low. Sales tax and value added tax (VAT) are slightly different taxes. Each state has different sales tax laws. Approximate sales tax rates, from memory, are: New York 4.0% Virginia 3.5% Maryland 5% Idaho 0% (in an attempt to populate the state) Montana 0% (ditto) D.C. 5.75%. Delaware 0% New Hampshire 0% However, they keep changing them, usually downwards in their competition to attract business. Edward ▲ Collapse | | |
in Puerto Rico, yes | Jun 2, 2011 |
with the exception of a few professional services (CPAs, architects, engineers, health professionals, educators, attorneys) almost everything is covered by sales tax in Puerto Rico, if your business generates $50,000 per year or more. | |
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Natalia Childs United States Local time: 03:23 English to Spanish + ... |
John Fossey Canada Local time: 06:23 Member (2008) French to English + ...
I may be wrong, but I don't believe there are any Value Added Taxes in the US. If there is an applicable tax, you are either liable or exempt. A VAT in the European (and Canadian GST) style lets businesses be refunded for any sales taxes paid to vendors. I don't believe that's the case in any US jurisdiction that I'm aware of. (I only just noticed the date of the question. I assume the OP is not still waiting for the answer!)
[Edited at 2015-06-24 20:53 GMT] | | |
No sales tax added | Jun 24, 2015 |
No. You don't add a sales tax to your fee for a language/translation service. In April, you pay YOUR INCOME tax based on last year's income. That's it. I live in Ohio. Also see Maria-Jose Pastor's comments above.
[Edited at 2015-06-25 00:41 GMT] | | |
I'm originally from Idaho | Jun 25, 2015 |
Edward Potter wrote: Delaware is the most popular state to incorporate in as the taxes there are very low. Sales tax and value added tax (VAT) are slightly different taxes. Each state has different sales tax laws. Approximate sales tax rates, from memory, are: New York 4.0% Virginia 3.5% Maryland 5% Idaho 0% (in an attempt to populate the state) Montana 0% (ditto) D.C. 5.75%. Delaware 0% New Hampshire 0% However, they keep changing them, usually downwards in their competition to attract business. Edward And their efforts seem to be... uneffective. I am considering the idea of moving back. It's not a bad place to live, all things considered. | |
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Yolanda Broad United States Local time: 06:23 Member (2000) French to English + ... MODERATOR California and other states | Jun 25, 2015 |
I have some memory that about fifteen years ago, California was trying to tax translations as part of their sales taxes, but they dropped that idea pretty quickly. Translations are services, not goods. | | |
US sales-tax law is extremely federal and it is difficult for anyone thinking in terms of a VAT-system to really grasp: Just a little taste of the issues involved: http://www.bizfilings.com/toolkit/sbg/tax-info/sales-taxes/sales-tax-in-service-industries.aspx You can see that there were some states taxing all s... See more US sales-tax law is extremely federal and it is difficult for anyone thinking in terms of a VAT-system to really grasp: Just a little taste of the issues involved: http://www.bizfilings.com/toolkit/sbg/tax-info/sales-taxes/sales-tax-in-service-industries.aspx You can see that there were some states taxing all services (probably more states by now) and other states taxing some services. You can also see that there are special regulations for retailers and manufacturers that are at least partially comparable to VAT refunds for businesses. Once interstate sales are involved, things can get very complicated with "use taxes", etc. It is correct that the (probably vast) majority of states do not tax services (including translations), but it is not correct that no states tax them. You need to refer your client to a good accountant who is familiar with the issues involved in this. ▲ Collapse | | |