I plan to call the tax office on Monday but I am wondering how consultants handle sales tax.
For example, if I develop a custom software solution for a client do I need to charge sales tax? I reside in Texas so if the client is in another state do I need to as well?
Here's a link where I think I would be a "taxable service":
FAQ: Texas Sales Tax
Taxable Services are listed here:
Taxable Services (96-259) (http://www.window.state.tx.us/taxinfo/taxpubs/tx96_259.html - broken link)
I think I would fall under the "Data processing" area although it only mentions "web site creation, storage and maintenance." which I think would also include other types of software development, but it does not mention any of that! Why does it mention specifically "web sites" but not software development in general?
The tax site lists "NAICS Codes" for sales tax and there are codes for every type of software area and I gather mine would be 41512, "Computer software consulting services or consultants".
I spoke with someone last night who provides medical consulting and she says she does not charge sales tax as she is providing a "Professional Service". And so I am kind of confused about this.
I don't want to pay unnecessary sales tax as the rate in Texas is 8.25%! On top of that I have to pay income tax, self-employment tax, or whatever Turbo Tax tells me.
Any feedback is appreciated.