Are you an LLC with clients outside the state you reside in? If yes, you may have to pay sales tax in every state you conduct business.
In a previous episode, we talked about sales tax on tangible goods, and today we transition into what the law says for businesses that don’t sell physical goods.
We continue our conversation with Derrick Winke of Wink Tax Services, a firm located in Troy, just outside of Detroit, Michigan. In his line of work, Derrick focuses primarily on tax returns for individuals and small businesses.
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Business Sales Tax – Key Points
- Not all states apply sales tax to digital products and services.
- Whether or not you collect sales tax on intangible goods is not always affected by where you choose to operate from.
- Understanding the legal concept of Nexus when it comes to doing business.
- There is always the possibility that the State will eventually go after third-party record keepers, to require them to report information.
- If you are an LLC outside of California and have clients in California, you may be required to pay taxes on the profits you make on those clients.
- In recent years, there has been a push by the IRS to require that 1099s be issued to more businesses.
- The requirement for form 1099 is different for corporations, LLCs, and LLPs.
- Cutting corners today could cost you a fortune in the future.
- Some useful questions to ask your CPA or Bookkeeper before you hire them.
- Most businesses fail because of bad record-keeping.
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