are you supposed to collect taxes for hosting? i think i have seen a company that does in the past? i am in michigan. or do i collect taxes ONLY from michigan people? i do not have a reseller tax id number. just my 38 number

i noticed rackshack is charging 5.00 per domain PLUS taxes. thats domains though. anyone know about this

From what I understand you dont have to pay tax for a service and that what web hosting is. You can collect taxes if you like since you have to pay taxes at the end of the year *mummbles*

I think this is right..

Taxes? What are taxes? :eek: :confused:

:eek3:


(joke)

I think its more about your local laws.

We have to charge VAT (UK type of sales tax) to all UK/Europe customers, but not to USA based customers.

From the short reading I did, it seems Michigan only requires taxes on tangible goods. But, always get your answers from an official source:

Michigan Business Taxes
http://www.michigan.gov/treasury/0,1607,7-121-1750_2143_2153---,00.html

Yes, I'm from Michigan aswell. You don't need to collect taxes, unless you want to. If your selling tangible goods you only have to collect taxes from residents of Michigan, since your providing a service (web hosting) you don't require tax collection.

In case anyone in Mississippi is starting a web host, it's not taxed here. All you need is your business license.

Keywords for future searches, cause I spent some time searching for this myself: Mississippi State Tax Commision, Mississipi sales tax

Yeah, Wisconsin too. Services aren't taxed (certain exceptions excluded).

Most hosts eat the taxes they need to pay and/or couple it in with the base fees. You can collect taxes if you like since you have to pay taxes at the end of the year *mummbles* Uhhh don't forget the quarterly rules for businesses... Also note that you can only 'collect' what the client may be obligated to pay. You can not collect, as tax, what you want them to pay out of what you yourself owe (would be too easy otherwise lol) ;)

As Deb said, you can't pass your direct taxes on as though they were indirect taxes to your customers. Meaning, the taxes you're refering to on paying "at the end of the year" are income taxes. These are taxes which you cannot legally pass on to the consumer. That would be like taking your annual income tax and charging it to your employer as an addition to your salary, instead of being a deducation from your salary.

Income taxes are based on Profit (Revenue minus Expenses) = you pay for (not an addition to your products cost)
Sales taxes are based on a percentage of the cost of the product (like, say, 8%) = the customer pays for

Richard

Of course in the UK you only have to charge VAT if your turnover is more than £55, 000 a year (turnover not profit!)

However if you're a soletrader not a company you'll need to declare them as earnings on your tax returns.

Originally posted by strongwire
Yeah, Wisconsin too. Services aren't taxed (certain exceptions excluded).

Such as Internet Access... I used to run an ISP in Green Bay and we had to collect sales tax on dial-up and DSL accounts. :(

You don't charge sales tax on hosting, in Michigan...because its not a tangible good.

You DO however have to PAY taxes on whatever money you make from your hosting business. Trust me on this, I know from experience, you want to make sure you get a GOOD accountant and make sure that your taxes are handled 100% correctly.

Bottom line, don't screw around with your taxes...and asking for tax and/or legal advice online (like usenet or WHT) is STUPID STUPID STUPID.

--Tina

http://www.ecommercecommission.org/ITFA.htm

Here's the official run down.