Most webhosts don't appear to charge taxes? Is this a dirty secret? Also, do you need a business license to sell hosting on the net?

For the hosts do charge taxes, how do most of them do it? Do they charge their own state and sales tax combined? In my state, that'd be 10% I'd have to either add or increase the hosting package prices.

services are not taxed if sold over internet (in US), but it's been a hot topic lately........ You may want to check out some goverment sites for up to date information

Originally posted by chrisb
For the hosts do charge taxes, how do most of them do it? Do they charge their own state and sales tax combined? Not sure what you mean by "state and sales tax combined," since in the US there is not federal sales tax. The bulk of sales tax is state tax; then some counties and other localities have added on to it. So I don't know what you'd be combining to come up with 10%.

Anyway, the answer to your question varies by state. In most states sales tax does not apply to web hosting or similar services but it some it does. Reportedly in earlier posts here, Texas is one of those, for example. To be sure, you should contact your state's finance or tax office.

I meant state tax, including my county tax; just as you had guessed.;)