Hello,
We here a CBR are members of the Virginia ISP alliance and as such we are trying to encourage datacenters to move into Virginia.
As a result we have a new informational site.
http://www.texastaxes.net

Sam

What is this about? Does this mean If I rent servers in Texas and make money with them I have to pay taxes on that $$$?

According to what we've been told and our research yes. I strongly encourage you to do your own however just to make sure. We've included all of the contact info for the Texas goverment on our site.

Unfortuntatly I can confirm that ):

On august 24th I filed a query with (and I quote): Tax Policy Division of the Texas Comptroller of Public Accounts (I hope that fits on his business card)

After mailing back and forth a little while they were trying to get information on my activities they reached the following conclusion:

Not only am I to pay the 8.25% salestax to Rackshack, but I also have to charge 8.25% salestax to all my hostingcustomers.

So even though I live in The Netherlands and client X lives in Australia and pays me for hosting I still have to pay 8.25% in taxes to the Texas government. *throws hands in the air in dispair*

Interestingly enough they never answered my next questions which was: Since I am currently operation at a loss and will probably continue to do so for the next 2 yrs this means that I am paying more salestax then I collect.

How do I, being from Europe and all, file a request for a tax refund since your forms can only be used by US citizens?

Still waiting for their reply....

Let them sue me for it. No you do not have to pay them any more tax, you already paid it when you paid Rackshack's fees. What you do with that server is your business.

Your customers are buying a service from you, not Rackshack.
You would only be responsible paying taxes in your area.

To me this is taxation without representation.

I will never disclose my business to Texas, I don't live in that state.

I paid the sales tax on the cost of my server.

If anything would ever come of this I would contact an attorney.

This is a example of exactly why internet taxes will not work.

On more thing. I have resellers who sell their space to customers of their own, are they responsible for paying tax on what they make?

This is utter nonsense.

I know how I would combat this if it was a issue.

FREE WEBHOSTING*

*=With purchase web site monitoring at $$$ per month per site :)

I agree about the nonsense part.

But yes, you tax your resellers, your resellers tax their customers.

Texas law: the server is located in their state. If you make money from that server by hosting then that is taxible.

And no, at the moment I do not pay it. Nor have they ever asked me to pay it. I figure at this point they also won't bother but by the time there is real money to be had (meaning when my company grows larger) it could become a problem.

But by that time I probably won't have my servers in Texas anymore.

Hello,
The thing you have to worry about there is the 4X multiple for back taxes.

Well I do appreciate the info, trust me I will be digging into it even more.

Thanks for the call BTW from Baylor Instruments AKA visuallink.com to my business advising me on my comments here.

Humm, who owns the domain name texastaxes.com and what is their benifit? To get people to get servers from them? The Virginia based ISP, visuallink.com? What is this Virginia ISP alliance?

Sorry, but I just wonder what your motives are running the site, replying here and calling my business.

I will talk with my attorney tomorrow, from what I read already I only have to "collect taxes" from my Texas customers.

Please don't take my word for it. I don't know. This is an issue you should seek professional advise, as I am as well.

Technically, if you have filed in your locality as a legitamite business and have a tax number as well, you can send the proper paperwork to your Hosting company in lieu of paying taxes, if your charging someome sales tax, you dont pay it yourself, that is double taxing and it is strictly illegal, if your not collecting sales tax then your right to simply pay the host the sales tax. also have a RaQ at RS and will never pay the sad state of texas a dime in tax, other than what RS charges me on my server monthly, I do not charge my hosting customers tax niether as by my locality I am not required to do such. If I were to charge them though, you can bet the sad state of texas would suddenly lose my tax dollars and only get my Tax ID #.. Mouse

Hello,
Our motives for the site are self serving I make no argument about that.
Howevever not primarily for our company but for
all ISPs in our state and to encourage an open/free internet without these forms of taxation.
We are clarifing an issue that has been the subject of much debate and much false/misleading information. Everything we provide is accurate to the best of our knowledge. I've never hidden my afiliation with CBR and I've never asked anyone to just blindly trust what I post.
This is a reason to migrate into Virginia and a definiate marketing reason for us. After the tech collapse Virginia has MANY MANY empty data centers near DC/Herndon and we are trying to encourage people to move into them to help our economy.
Our aliance is not singeling out Texas, we plan to show that datacenters in Florida/California are also at risk. (Not do to taxes
but natural disasters).
Expect much more information on that domain quickly.
Sam

hey sam,

isnt it illegal for Texas to charge me a sales tax for an item that I am using in Maryland?


Jim

When my lawsuit wraps up I plan on starting one in Michigan, maybe we need to talk. ;) 12 degrees outside right now. Wouldn't need to run the air conditioners as much here :D

Say, I live in Michigan. When you start it, can I come work for you? :cool:

Hi Jim,
It been awhile. To answer your question not really. They can do it because the server that you are leasing is physically in Texas. It is the same as if you lease a store front in Texas and sell widgets, but live in Maryland. Texas is still going to charge you sales taxes on your widget sales. And if somebody(your customers) subleases that store front from you and sells the widgets Texas is still going to charge them sales tax even if they live in Maine. The reason why they can do this is that the server is located in the state of Texas therefore all the transactions legally take place in the state of Texas. If you need more information all you need to do is call the Texas comptroller at 1-800-252-5555 or 1-800-248-4093. He answers his own phone and is very nice.

Thanks
Sam