Hello, first time poster here ;). I am about to start a web hosting business and I am looking in to the legal side of things. I am not experienced at all in anything business related (although I have tons of computer experience) because I am only a high school student.

Basically, I am wondering if any of you experienced people would have some advice/tips/resources for me...
So far as I can tell, web hosting businesses are not taxed in the state of Connecticut

CREATION AND MAINTENANCE OF WEB SITES: Effective July 1, 1997, under Conn. Gen. Stat. §12-407(2)(i)(A), as amended by 1997 Conn. Pub. Acts 316, §6, taxable computer and data processing services do not include:


services rendered in connection with the creation, development, hosting or maintenance of all or part of a web site which is part of the graphical, hypertext portion of the Internet, commonly referred to as the World Wide Web.

(http://www.drs.state.ct.us/pubs/PS's/1998/ps982.html)

If this does mean webhosting/design businesses are tax exempt, do I still have to register my business in some way?

Anything would be appreciated :)

Thanks,
Gabe

might mean that if you have a company host your site, you can not get a tax deductable for it.
ie. if you buy a company phone, you can get tax deducatables for it

Registering your business is another issue, and usually you'd have to register the business, but really (although I used to live there), I don't know what the current laws are. I'd invest some time and money into talking with a CPA who is familiar with internet business and see what they have to say.

I checked the code reference you gave and it concerns sales tax exemption. What that means is that you don't have to collect sales tax on your sales, nor are you responsible for paying state sales tax on those sales.

For a business to be tax exempt, it must fall under Section 501 of the Internal Revenue Code, which any business which intends to make a profit does not do.

Now some states may exempt the income from such businesses, but that is something I've never heard of. Definitely talk with an accountant familiar with state laws.

BTW, I'm a web host and in real life an accountant for a not-for-profit organization organized under North Carolina laws and recognized as tax exempt under IRS Section 501(c)(3).

Best wishes to you!