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Old 09-07-2016, 10:56 PM
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Post Charging Sales Tax when remote work in another state

Resident of Texas (not required to file state returns) - I have an Sole Proprietorship - I connect remotely to my client in Hawaii and perform work on their computers.

My question is, because I do file a Federal Return, in addition to an hourly rate I charge .08% in sales tax (as is on every receipt I get for businesses in Texas when I buy things).

1) am I ok to do this?
2) if so, what guidance or regulation can I send them to in order to back that up?

Thank you in advance.



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Old 09-07-2016, 11:49 PM
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Resident of Texas (not required to file state returns) - I have an Sole Proprietorship - I connect remotely to my client in Hawaii and perform work on their computers.

My question is, because I do file a Federal Return, in addition to an hourly rate I charge .08% in sales tax (as is on every receipt I get for businesses in Texas when I buy things).

1) am I ok to do this?==> depends; If you have a physical presence in hawaii, such as a store, business office, or warehouse, you must collect sales tax from customers in hawaii. If you do not have a physical presence in hawaii, it is not required to collect sales tax for sales into hawaii. Consumers who live in a state that collects sales tax are technically required to pay the tax to the state even when an Internet retailer doesn't collect it. When consumers are required to pay tax directly to the state, it is referred to as "use" tax rather than sales tax.


you need to determine where you have sales tax nexus and to set up your online store (and any other channels you might sell on) to collect sales tax;
States where you have nexus require you to secure a sales tax permit before you begin collecting sales tax.

2) if so, what guidance or regulation can I send them to in order to back that up?===>>as said previously.



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Old 09-12-2016, 12:14 PM
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Thanks for the reply

I do not have a physical presence in Hawaii but I still pay federal taxes - wouldn't that charge be allowed or expected to cover my federal taxes that I pay?



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Old 09-12-2016, 09:10 PM
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Originally Posted by angelhl View Post
I do not have a physical presence in Hawaii but I still pay federal taxes - wouldn't that charge be allowed or expected to cover my federal taxes that I pay?
Sorry I am not QUITE sure what your questionis; however, you may claim sale tax that you pay on your 1040 ASLONGAS you itemize deductions;IRS permits you to write off either your state and local income tax or sales taxes that yopu pay when itemizing your deductions. So UNLESS you pay the sale taxes, you can not claim sales taxes on your return.



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